October 31, 2009

Now that the economy is officially out of recession, the question is 'where are the jobs?'. Jobs are still being shipped to low wage countries and being replaced with robots, automatons and computers. Productivity is still increasing due to machines replacing humans, and unprogammable work is still being outsourced to countries where workers will work for pennies on the dollar. No government program has been proposed for reversing this trend. In fact government programs, left over from the Bush administration are still in place, for encouraging the outsourcing, offshoring and exportation of jobs and retention of the profits offshore where they cannot be taxed.

And then there is always the hope for the next new industry that's going to get fired up and start the next boom cycle sort of like TV in the 1940s and the internet in the 2000s. Well, that new industry is nowhere in sight. Green technology might be that industry but private enterprise seems incapable of firing it up enough to create jobs, and government seems incapable of being the midwife. Meanwhile, other countries like China are investing heavily in the green economy, and Germany and Denmark have gotten a huge headstart. So while the US dithers, other countries take the lead.

While I believe the Obama administration would like to do something about the job situation and the subsequent foreclosure situation - home loss following on the coattails of job loss - any new Republican control of either Congress or the Presidency will lead to an era of total indifference to either of these crises. In fact it will lead to an era of acceleration of them. Obama so far has stuck an ineffectual finger in the dike, but Republicans would pull out all the stops and let the waters flood in. In fact the new paradigm would be not concern over 10% unemployment but celebration of rising GDP. How can GDP continue to rise while unemployment remains high, you might ask? Simple. Work has been outsourced. Machines have replaced workers. High tech workers with H1B visas have been insorced and illegals have been insourced to do the menial labor. The US is in the process of transitioning from a middle class society to a corporatocracy - a society by and for the rich. Obama's government has not created the equivalent of FDR's CCC or WPA. That's the Civilian Conservation Corps and Works Progress Administration. We need a NIIC, a Nation Infrastructure Improvement Corps or a GELR, Government as Employer of Last Resort. Instead we have the CCC - Corporate Control of Congress. Whereas FDR could ram the New Deal through, the Democratic Congress has 40,000 lobbyists breathing down their necks who could care less about creating new jobs for high wage Americans. FDR had maybe 400 lobbyists to contend with.

The new paradigm, I might call it the neocon paradigm, is that the economy can hum along very nicely with a high degree of unemployment, poverty and homelessness. A certain percentage of the population say 10%, 20% or even 30% can simply be written off as nonparticipants in the economy much less the work force. The remaining majority of people will keep the wheels of the economy humming. The economy simply does not need a large percentage of potential workers; it can get along without them and huge profits can still be made without their participation. In fact higher profits can be made withouut their participation. And because they will be reduced to penury, they will simply not be a revolutionary force to overturn the existing order, an order that will create great wealth for a few while a fairly large minority eke out a meager existence. Neocons are willing to test the limit of how great that minority can be while still sustaining a profitable existence for the investor class. How great a minority of economically disenfranchised people can an economy sustain without giving rise to a movement whuch would overturn that economy?

As we know from other parts of the world, a small wealthy class can coexist very nicely with a large impoverished class. In fact it is the norm in most parts of the world. Laissez faire capitalism tends to produce societies of large scale economic disenfranchisement. And in societies in which the political process has been taken over by lobbyists who are the handmaidens of wealthy corporate interests, this society is incapable of doing anything that would amerliorate the centralization and concentration of wealth in the hands of a few. Let's face it. FDR did not have to fight an army of lobbyists when he put forth the New Deal. The New Deal strengthened the American middle class. Corporate control of Congress fueled by campaign contributions and the revolving door promise of lucrative post-political jobs only strengthens the investor class while kicking out the jambs which support the middle class.

With the corporate takeover of the government virtually complete, there are no democratizing forces left that would spread the wealth to the middle class and the poor. The economically elite have taken over the world, and while that might seem a good thing to some - that the best and the brightest have gained sway over the riff raff - any society that professes to have a sustainable middle class must tamp down the ambitions of the elite and spread the wealth to the middle class. The elites are capable of creating great wealth with their superior intelligence and gargantuan work ethics, but that wealth creation no longer requires the participation of large numbers of manual and college educated laborers. Therefore, the average person is largely left out of this process. Meanwhile, effectively regressive tax policies accelerate the process of wealth creation for the few. CEOs, who used to make 40 times what the average worker made, now make 400 times that amount. Wealth creation tied to stock options mean that the bottom line becomes even more important, and the resultant created wealth is so huge that it can't possible be spent and is used to control the political process and the minds of the masses through advertising in addition to be passed down to subsequent generations in perpetuity thus creating an effective aristocracy. The sclerotic titled aristocracy of the British empire is being replaced by a hipper untitled aristocracy of inherited and perpetuated investor based wealth. The landed aristocracy which controlled the political process in 18th century Britain is being replaced with the stateless investor class of the 21st century.

The high tax rates of the Eisenhauer administration, which resulted in money being poured back into the business rather than being taken out in salaries, large amounts of which would be confiscated through taxation, have been replaced by low tax rates which give incentives to private equity funds to tear businesses apart and feast off the remains. Growing a business is no longer as important as short term profits because short term profits can make one wealthy without having to spend a lifetime building a business. When a person can make a billion dollars in one year as Bill McGuire of United Health Care did in 2006, it is not necessary to work more than one year in order to obtain immense wealth. That's why the emphasis is on short term profits. That's why Wall Street is focused on making a killing in a short period of time taking huge gambles and to hell with what that does to the rest of the economy. They took huge gambles and lost, the US government rescued them and now they're back to awarding themselves millions of dollars in bonuses which can only be sustained by taking more huge gambles. The casino economy prevails because huge incomes are not redistributed to the middle class. If they were, we would see a lessening of the casino economy and the building of sustainable businesses which, nevertheless, might not require the hiring of large numbers of workers. Instead we see short term large scale wealth creation and the creation of a landless aristocracy which controls the political process through the buying off of politicians. Rather than there being a House of Lords, there is a House of Lackeys who do the bidding of the untitled lords who control the economy.

We might pose the question 'if private enterprise under the best of conditions does not require the hiring of large numbers of workers, how will the US economy ever sustain a middle class which is predicated on middle class jobs?'. It may come down to the fact that the government will have to be the employer of last resort which would require a transfer of wealth from corporations and the wealthy to the government in terms of taxation and from the government to workers in jobs created by the government. If private enterprise cannot or will not create jobs, then jobs will have to be created and wealth redistributed by other means. In the long run this is not all that bad for business in a consumer led economy like the US (70% of US GDP is in consumption) since consumers will pour that redistributed wealth back into consumer items and hence into the businesses from which taxes were taken in the first place. The money will just be recirculated instead of going into the Wall Street casino.

Obama is fighting a rearguard action. Sure, he would like to help the middle class; sure he would like to help the poor. But he is boxed in and hemmed in by the moneyed class which buys off both political parties and upon whom both political parties depend for campaign contributions and revolving door jobs as corporate directors and lobbyists. So Obama is reduced to tinkering around the edges while Republicans salivate at the prospect of making Obama fail so that they can return to power and, with no apologies, accelerate the process of corporate control of the political and economic processes assuring themselves of great personal wealth by so doing. With neocon control of the media as exemplified by Rush Limbaugh, Glen Beck and Fox News, the neocons will continue to propagandize the so-called low information voters and channel their anger towards whatever progressive elements are left thus enlisting the middle class in a process leading to its own destruction and acquiescence in its own political and economic diminution and ineffectiveness.

The only hope for the future comes not from the US itself but from the rest of the world which has disenamored itself from the spell of America penis worship. As the US has discredited itself from its position of being the world's know-it-all, the Emperor has stood naked for the rest of the world (but not Americans themselves) to see. Canada has had not one bank failure during the continuing US led recession. Iceland wakes up and sees the errors of its ways. China, with a much different political and economic model, one which metes out harsh punishments but nevertheless is concerned about its emerging middle class, continues to surge ahead. Europe, which is fundamentally middle class oriented, has not suffered the joblessness of the US due to direct government intervention. The emerging BRIC contries are rejecting World Bank imprecations to privatize every aspect of their economies and are organizing in such a way as to prevent transnational corporations from exploiting their resources and instead are nationalizing and profiting from the sale of their resources in order to directly help their middle and poor classes.

So while America continues to transfer wealth from the middle class to the rich via a transfer of foreclosed middle class homes to the investor class among other means, the rest of the world gets it. Unregulated laissez faire capitalism leads to plutocracy and plutonomy.

I'm One of America's New Homeless

Brianna Karp lost her job, is broke and is now living in a trailer – but she's not beaten yet

by Brianna Karp as told to Claire Prentice

I always thought homelessness was something that happened to other people. I was 24, educated, had a $50,000-a-year job as a personal assistant, a cute cottage in Orange County, California, friends and a dog. And then, one day in December last year, I went into work to discover my company was laying off lots of staff and I was one. It was the start of a string of bad luck.

Initially, I moved in with my mum but we've always had a volatile relationship and it didn't work out. As of February this year, I was officially a homeless woman. The idea terrified me. I cried and cried. How could this be happening to me?

As I contemplated life on the street, I had a phone call from the coroner's office in Los Angeles. My biological dad had killed himself and had left me his trailer and car. I also discovered I have two half-sisters, aged 17 and 14. They travelled from Texas to cremate the body and we met; it was surreal.

I had an unhappy, unstable childhood. My family are Jehovah's Witnesses and I grew up in the religion. But as I got older, I read up on it and began to see it as a cult. Certainly it's a very judgmental religion, which shuns people who leave and has an apocalyptic worldview. I was 18 when I left. Since then, my relationship with my family has deteriorated.

I had nowhere to go, so I moved into my dad's trailer and parked it in a Wal-Mart parking lot. I'd heard from a friend that they sometimes let people in trailers stay in their lots. I had no running water, gas or electricity, but it was a place to crash.

About 30 other people were living there in trailers and cars. We tried not to draw attention to ourselves so customers didn't complain. There wasn't much socialising but having other people around made me feel safer. One "neighbour" was a former doctor who spoke several languages. Another used to own three houses. We were a new face of homelessness – middle-class people with stable lives that the recession had wiped out.

I will never forget my first night in the trailer. It was cold and deathly quiet. Every noise made me jump. I didn't sleep a wink and spent all night afraid someone would break in.

I spent my days in a coffee shop, surfing the internet for jobs and sending out CVs. I would buy $5 cards each month that entitled me to drink coffee and use unlimited Wi-Fi. I began writing a blog, girlsguidetohomelessness.com, and using Twitter as a way to keep sane. My first reader was a guy from Portsmouth called Matt, who became homeless after losing his job and his wife. He was now living in Huntly, Scotland, and ran a website for homeless people. We really hit it off and started emailing and instant messaging for hours at a time.

Just as life seemed to be getting better, I came back one day to discover my trailer had been towed away. I found out it had been impounded and would cost me $2,600 to get out. The amount is going up by $80 every day and I don't have the money. I managed to get a friend to rent me his old trailer instead.

Matt decided to use his savings to come for a visit. It was a gamble, but it has been much better than either of us dared hope. We have so much in common – art, history, architecture, theatre – and he understands me better than anyone I've ever met. Obviously, we'd both like our lives to be different, but we try not to take it out on each other. Unfortunately, Matt has to return to Scotland soon and we don't know when we'll see each other again.

I've sent out hundreds of CVs since I got laid off, and recently wrote to E Jean Carroll, American Elle's advice columnist. I had just messed up a job interview and asked her how I could get a second chance, signing off "Homeless But Not Hopeless". I still can't believe what happened next: she published my letter and offered me an internship on her website, askejean.com. I've now started the internship and have been busy replying to readers' problems. I've been through a lot in my short lifetime, and I take their problems very seriously.

Because I need to be available for job interviews, I'm doing my internship remotely – from my trailer. I get $150 a month for expenses. A lot of people think my life has been turned around – but the reality is that I'm still homeless and unemployed.

October 28, 2009

Healthcare Hypocrites

by Jim Hightower

How do you spell "hypocrisy"?

Try this: "H-Y-P-O-C-O-N-G-R-E-S-S." The hypocongress consists of those Republicans and Blue Dog Democrats who have risen up on their hind legs in recent weeks to snarl and howl at any mention of a government role in meeting America's health care needs. "Socialism," they bark — we won't allow Barack Obama and the liberals to create a Washington-run, big-government intrusion into the hallowed private market. Sen. Jim DeMint, a South Carolina Republican, even pledged to fight so ferociously that the health care battle would be Obama's "Waterloo."

What a stand-up guy for free enterprise! What an ideologically correct appeal to laissez-faire principle! And, let me add, what a crock!

What these bellicose market-purists hope you don't discover is that they are closet socialists. As members of the congressional elite, they and their families are governmentally blessed with their very own gold-plated, taxpayer-financed, Washington-run health care system. And, they loooove it.

Theirs is such an effective system that not a single member of the hypocongress has been willing to give it up — even though they surely realize the political peril of being exposed as rank hypocrites for enjoying the very program they so adamantly reject for you.

Actually, they happily take a double dip in the soothing waters of public health care. First, they enroll their entire families in the Federal Employees Health Benefits Program — and you probably would, too, if it were available to you, for it's the Rolls Royce of health plans.

For example, while even the best employer-provided health policies offer only one or two types of coverage, FEHBP is a Chinese menu, offering dozens of coverage choices that allow its lucky members to assemble a plan that meets their unique needs. Members also need not worry about being denied coverage because of some pre-existing condition — once sworn into office, lawmakers and their families are immediately and fully insured, with total access to a national network of doctors and hospitals.

But here's the sweetest part of their Rolls Royce ride: up to 75 percent of the premiums are paid for by taxpayers, many of whom are lucky if they can afford to buy an old Yugo-level of health coverage in the vaunted private market.

Well, snaps the hypocongress crowd, even if FEHBP is essentially government-paid insurance, at least it's not socialized medicine, with doctors working for the government — so, technically, we're still pure.

Ah, that raises the second bit of secret socialism that lawmakers have mandated for themselves.

Right under the Capitol dome, conveniently situated between the Senate and House chamber, is the Office of the Attending Physician. Inside are more than a dozen navy doctors, nurses, medical technicians, pharmacists and other health professionals, all employed by the government solely to attend to a select clientele: the 535 members of Congress.

Let's say that, after giving a fiery speech on the floor assailing the evils of government-run health care, a lawmaker gets gaseous or has a tongue cramp. He or she can pop right into the OAP for — yes! — some government-run health care. No appointment needed, no pesky insurance forms to fill out, no co-pay — just care.

For this, members pay a flat fee of $503 a year. A year! You and I are taxed to cover the real costs of this elite service. And that's not the end of public health benefits for lawmakers — if they need a specialist, an operation, therapy, rehab or other pricey procedure, it's all free at the government's Walter Reed and Bethesda Naval hospitals.

If it's good enough for them, why not us? The public deserves what the Congress has, and any member who opposes extending it to us should automatically be stripped of their privileges.

For a model of integrity, they might look to Sen. Sherrod Brown, D-Ohio, and Rep. Steve Kagen, D-Wis. — both of whom have rejected taking congressional coverage until everyone in America has coverage of equal quality. I don't think the noisy naysayers are looking for integrity, however — not as long as they can get away with their abominable hypocrisy.

Copyright 2009 Creators.com

National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families, environmentalists, small businesses, and just-plain-folks.

Among the conventional wisdom that we hear every day in the business press is that developing countries should bend over backwards to create a friendly climate for foreign corporations, follow orthodox (neoliberal) macro-economic policy advice and strive to achieve an investment-grade sovereign credit rating so as to attract more foreign capital.

Guess what country is expected to have the fastest economic growth in the Americas this year? Bolivia. The country's first indigenous president, Evo Morales, was elected in 2005 and took office in January 2006. Bolivia, the poorest country in South America, had been operating under IMF agreements for 20 consecutive years, and its per-capita income was lower than it had been 27 years earlier.

Evo sent the IMF packing just three months after he took office, and then moved to re-nationalise the hydrocarbons industry (mostly natural gas). Needless to say this did not sit well with the international corporate community. Nor did Bolivia's decision in May 2007 to withdraw from the World Bank's international arbitration panel, which had a tendency to settle disputes in favour of international corporations and against governments.

But Bolivia's re-nationalisation and increased royalties on hydrocarbons has given the government billions of dollars of additional revenue (Bolivia's entire GDP is only about $16.6bn, with 10 million people). These revenues have been useful for a government that wants to promote development, and especially to maintain growth during the downturn. Public investment increased from 6.3% of GDP in 2005 to 10.5% in 2009.

Bolivia's growth through the current world downturn is even more remarkable in that it was hit hard by falling prices for its most important exports – natural gas and minerals – and also by a loss of important export preferences in the US market. The Bush administration cut off Bolivia's trade preferences to the US that were granted under the Andean Trade Promotion and Drug Eradication Act, allegedly to punish Bolivia for insufficient co-operation in the "war on drugs".

In reality, it was more complicated: Bolivia expelled the US ambassador because of evidence that the embassy was supporting a violent rightwing opposition that was trying to topple the government. In any case, the Obama administration has so far not changed the Bush administration's policies toward Bolivia. But Bolivia has proven that it can do quite well without Washington's co-operation.

Ecuador's leftist president, Rafael Correa, is an economist who, well before he was elected in December 2006, understood and wrote about the limitations of neoliberal economic dogma. He took office in 2007 and established an international tribunal to examine the legitimacy of the country's debt. In November 2008 the commission found that part of the debt was not legally contracted, and in December Correa announced that the government would default on roughly $3.2bn of its international debt.

The Correa government also incurred foreign investors' wrath by renegotiating its deals with foreign oil companies to capture a larger share of revenue as oil prices rose. And Correa has bucked pressure from Chevron and its powerful allies in Washington to drop his support of a lawsuit against the company for alleged pollution of ground waters, with damages that could exceed $27bn.

How has Ecuador done? Growth has averaged a healthy 4.5% over Correa's first two years. And the government has made sure that it has trickled down: healthcare spending as a percent of GDP has doubled, and social spending in general has expanded considerably from 5.4% to 8.3% of GDP in two years. This includes a doubling of the cash transfer programme to poor households, a $474m increase in spending for housing, and other programmes for low-income families.

Ecuador was hit hard by a 77% drop in the price of its oil exports from June 2008 to February 2009, as well as a decline in remittances from abroad. Nonetheless it has weathered the storm pretty well. Other unorthodox policies, in addition to the debt default, have helped Ecuador to stimulate its economy without running too low on reserves.

Ecuador's currency is the US dollar, so that rules out using exchange rate policy and most monetary policy for counter-cyclical efforts in a recession – a significant handicap. Nonetheless Ecuador was able to cut deals with China for a billion-dollar advance payment for oil and another $1bn loan.

The government also has begun requiring Ecuadorian banks to repatriate some of their reserves held abroad, expected to bring back another $1.2bn, and it has started repatriating $2.5bn in central bank reserves held abroad in order to finance another large stimulus package.

Ecuador's growth will probably come in at about 1% this year, which is pretty good relative to most of the hemisphere. For example, Mexico, at the other end of the spectrum, is projected to have a 7.5% decline in GDP for 2009.

The standard reporting and even quasi-academic analysis of Bolivia and Ecuador says they are victims of populist, socialist, "anti-American" governments – aligned with Venezuela's Hugo Chávez and Cuba, of course – and on the road to ruin. To be sure, both countries have many challenges ahead, the most important of which will be to devise and implement economic strategies that can diversify and develop their economies over the long run. But they have made a good start so far, by giving the conventional wisdom of the economic and foreign policy establishment – in Washington and Europe – the respect it has earned.

The economy of the US is based on consumerism. 70% of GDP is due to American consumption. Meanwhile, a billion or more people in the world are starving and don't have access to clean water. What is wrong with this picture? If the human race were rational, it would seem that the first order of business would be to see to it that everyone in the world was at least adequately fed and had clean water. Instead there is a lopsided distribution of goods and services with the first world gluttonously hogging much more than its fair share. And for what? So they can die prematurely from obesity?

One third of Americans are overweight or obese. This is the first generation to have a shorter life expectancy than their parents. While they die of malnutrition and disease in Africa, they die of meganutrition, supersized nutrition and disease in America. Americans are not only overconsumers; they are stupid consumers. If they were intelligent consumers, they would not consume excess calories. They would get off their butts and excercise, and they would organize in such a way as to offshore the extra calories, not their jobs.

This is why private enterprise doesn't work. Because it is only interested in profits, it doesn't see to it that goods, services and even calories are rationally distributed in the world. And that's to the detriment not only of the people who have too little but also to the detriment of the people who have too much. There's no reason why, once a technology is well developed, it can't be distributed throughout the world to bring its benefits to all people in the world. The only thing preventing this is the profit motive and the sheepishness of governments to interfere with private enterprise. For instance, the basic principles of how to obtain clean water and sanitation have been well known for centuries. Yet private companies want to capitalize on clean water by privatizing water systems throughout the world. Instead if governments just did the job in behalf of all their people, not just the ones who could pay, disease would be reduced.

Inequality is one of the biggest threats to peace in the world. The fact that there is a minority of haves and a majority of have nots contributes to tension and war among the world's peoples. Instead of the haves fighting the have nots in asymetrical wars - asymetrical because the haves have advanced weaponry and the have nots have improvised explosive devices - the advanced world would be better off sharing their resources and knowledge with the have nots. Reduction of inequality will make the world a more peaceful place. The only difference between terrorists and warmongers is that the terrorists are poor and hence have weapons-of-poverty while the warmongers of the advanced nations have all the weaponry money can buy.

The US needs to back off from worshipping the profit motive and devoting itself to the military-industrial complex, pouring money into war and weaponry, and to start redistributing its knowledge and resources to the rest of the world. It's not only the right thing to do; it will bring about more fruitful results. There is overconsumption in American life leading to death, and there is underconsumption in the poorest parts of the world leading to death.

War mongers and profiteers are literally sucking the life blood out of American society turning the US itself into a nation of haves and have nots. Capitalism is devouring itself while it is intent on devouring the rest of the world. The only problem is that the US is running out of natural resources so it must import them from the rest of the world, but the rest of the world is starting to realize that they can charge the US big bucks for these resources. It just doesn't have to give them away. Therefore, the US needs to become more self-sufficient at the same time that it needs to divulge its technology at the level of human needs to the rest of the world. Production of clean water and development of sanitation systems is not rocket science. It is infrastructure and infrastructure development is best undertaken by governments not private enterprise.

The US needs to discourage the rampant greed that now runs the country and results in banks hiring lobbyists - six for every Congressperson - to influence government to develop policies in the interest of banks. And its all for the purpose of making huge sums of money for some people in the right positions who contribute nothing in terms of production of real goods and services much less in terms of rationalizing the distribution of water, sanitation, food and medicines in the world. 'We are all in this together' applies to the whole world not just to arbitrarily drawn nation states on a map. National borders are artificial contrivances. The technology to develop a good and decent lifestyle for all the world's peoples has been known for some time. The systems for putting it in place have been held up by greed - wanting to profit off of basic goods and services - and lack of organizational smarts. The human race has been dumb in coming up with methods of organization that are beneficial to human well-being and selfishness accounts for the rest.

A post consumerist society would lay the emphasis on creating a basic, healthy decent way of life for all human beings. From this basic level of well being people could spread out to add the icing to the cake. What is necessary for a basic level of well being is well known: clean water, adequate sanitation, education, health care, decent housing, wholesome food. Those who aren't in a position to provide these things for themselves should be provided for. Those who are in a position to provide more than a basic level of well being for themselves should be free to do so, but this shouldn't be carried to the level where people can gluttonously overprovide for themselves to the detriment of their well being. Those who can afford to eat a zillion calories a day aren't doing any good for themselves. It's in their own best interest if someone steps in and takes away the spoon even if it's the government. Overconsumption just like underconsumption leads to ill health. It's not irrational for governments to step in and say 'Hey, you guys are eating (consuming) too much. You would be better off if you ate (consumed ) less and gave the excess to those guys over there who don't have enough.' Greed and overconsumption kill just as lack of ambition and underconsumption kill.

Free people, who aren't wise enough to limit their consumption and share with people who don't have enough, don't deserve to be free. They're not only killing others; they're killing themselves.

October 27, 2009

Finally, there will be a public option in the health care reform bill. Harry Reid is responsible for putting it in. States will individually be able to opt out, but will do so at the peril of their constituents and their jobs. President Obama, while favoring a public option, never appeared to be too concerned about it. He never made it the be all and end all of health care reform. By means of this strategy he defused the harshest criticism and deflected the right's attempt to turn the debate into a pitched battle - the perfect rope-a-dope strategy made famous by Muhammed Ali who let his opponents use up all their energy pummeling him with blows that never found their mark. Don't give the opposition the ammunition it needs as there is nothing to fight against. I always thought that the public option would be slipped in at the last minute. Chuck Schumer deserves a lot of credit for coming up with it apparently just three weeks ago.

It is so much better than a trigger since it sets the status quo as the public option, and therefore, places the burden on the states to change it whereas the trigger sets up no public option as the status quo and places the burden on government to change it. State politicians will have to think twice about opting out if the public option is wildly popular among their constituents. Politicians still have to be democratically elected no matter how much money they take from the health insurance industry. Therefore, they will think twice about opting out of a popular program. We know which states will opt out - southern states like Texas, Louisiana, Mississippi, Georgia, Alabama, North and South Carolina - blue states, states controlled by the Republican party. At the same time some of these states are among the poorest in the nation and could greatly benefit from the public option. That should lead to a lot of interresting politics.

Just as some states rejected money from Obama's stimulus program thus denying their constituents much needed extended unemployment benefits and other help, these Republican governors and legislators will attempt to do the same with the public option. At some point though their constituents will probably rebel. Why should they stand idly by and watch their health care premiums go through the roof while in a nearby state people are enjoying the same benefits for much lower premiums? It really does put the Democrats in the cat bird seat and stand them in good stead for the 2010 elections.

But Obama would have won either way. If there were to be no public option, he could have still declared victory since he didn't make it a centerpiece of his campaign. Now he can declare victory because he always said he wanted one so he is getting precisely what he wanted. And he is on a roll thus enabling him to proceed with other much needed programs like a jobs program. There is still a way to go though. By all indications they are still a few votes short in the Senate although I don't think Harry Reid would have put it in there if he wasn't sure he could round up the remaining few votes.

But for now Democrats can rejoice. They finally had the balls to use their political power to do something the people wanted handing Republicans and the insurance industry a big defeat in the process. President Obama comes out with a tremendous victory also thus defeating all those like Rush Limbaugh who wanted him to fail. It's Obama 1, Limbaugh 0. The Republican blatherers and fulminators will have to take a back seat as well as all the lobbyists and pay off artists who attempted to use money to control the political process. Although they insisted the public option was dead, it turns out that it wasn't. Paraphrasing Shakespeare, methinks the Republicans protestethed too much, and Obama rope-a-doped them and the health insurance industry by not falling into their trap and giving them something that would have raised their hackles even more!

In the past, I have written about Reagan´s conservative fiscal philosophy of in essence being, "to each his own and to hell with the rest" while he amassed record Deficits and tripled the National Debt mainly by exploding the Defense Budget and Reducing Taxes for the rich with NO "Trickle Down" effect to the bottom 80% of households. Reagan's unbridled philosophy of capitalism launched the ultra-conservative and libertarian US movements over the past 30 years ... the latter represented by the Austrian School of Economics and its current political voice in the US Senate, Ron Paul.

The egocentric, twisted, self-serving social-economic premises underlying these movements are alive and working as we hear repeatedly and manipulatively (directly and indirectly) the reference to Thomas Jefferson´s refrain that, "government is best that governs least." Hypocritically, the advocates of "a small minimal non-proactive government" ignore fact that Jefferson´s democracy had two principles he saw as working together, namely, support for the common man (middle class) and minimalist government. By common man, Jefferson would have included consumers and factory workers as in his time most people worked on farms.

This "balanced middle appraoch" we had in the 50s through late 70s where private businesses were entirely free so long as no egregious harm to workers, consumers or the environment occurred recognized that public and private institutions need both to be vigilant against that which is counter-productive to the common good ... what I have been calling for, i.e., balancing the ``WE´´ (Community) and `` I´´ (Ego or Individual) forces in our society for a more engaged and proactive approach to solving and minimizing, if not entirely preventing, recurrence of the systemic societal breakdowns we have been experiencing past decades.

John, in this regard, you might want to reprint for readers of Will Blog for Food a brilliant writing by Paul A. Samuelson about the Darwinian economics of the ultra-right and libertarian schools of thought. Published in October 2008, the title of this writing is, ``Farewell to Friedman-Hayek Libertarian Capitalism.´´ You are no doubt familiar with it. Professor Samuelson alludes further to this theme in a concise article just published in the International Herald Tribune entitled, "Heed the Hopeful Science." I´m much in agreement with this gentleman-economist-scientist´s stream of social-political-economic thought.

Our democracy in ideal form is all about insuring social well-being by effective restraints to protect legitimate public interests and by infrastructure investments/incentives prudently and proactively approached. This all done in concert with conservative thinking of insuring that government´s key function is to help the social organism cure itself, recognizing the dynamic, innovative contributions of the private sector and that government cannot cure all problems nor own the economy. It´s about recognizing the excesses of raw capitalism embraced by right-wing economic anarchists advocating pure reliance on rugged individualism and market forces. Thus, it´s finally all about a balance that integrates the Community and Individual aspects of human nature in our society´s development within a rapidly, increasingly complex interdependent world.

Will find some time later to give coherent reply to your question about distributing more "public and private options" throughout our economy ... raising the deeper question of what is the role of government and the private sector in this flat internet, virtual networking, multicultural world where jobs in advanced Western countries are being systematically destroyed by low-wage, productive nations like China and India? Best regards,Frank

And now there are five -- five Wall Street behemoths, bigger than they were before the Great Meltdown, paying fatter salaries and bonuses to retain their so-called"talent," and raking in huge profits. The biggest difference between now and last October is these biggies didn't know then that they were too big to fail and the government would bail them out if they got into trouble. Now they do. And like a giant, gawking adolescent who's just discovered he can crash the Lexus convertible his rich dad gave him and the next morning have a new one waiting in his driveway courtesy of a dad who can't say no, the biggies will drive even faster now, taking even bigger risks.

What to do? Two ideas are floating around Washington, but only one is supported by the Treasury and the White House. Unfortunately, it's the wrong one.

The right idea is to break up the giant banks. I don't often agree with Alan Greenspan but he was right when he said last week that "[i]f they're too big to fail, they're too big." Greenspan noted that the government broke up Standard Oil in 1911, and what happened? "The individual parts became more valuable than the whole. Maybe that's what we need to do." (Historic footnote: Had Greenspan not supported in 1999 Congress's repeal of the Glass Stagall Act, which separated investment from commercial banking, we wouldn't be in the soup we're in to begin with.)

Former Fed Chair Paul Volcker, whose only problem is he's much too tall, last week told the New York Times he'd like to see the restoration of the Glass-Steagall Act provisions that would separate the financial giants' deposit-taking activities from their investment and trading businesses. If this separation went into effect, JPMorgan Chase would have to give up the trading operations acquired from Bear Stearns. Bank of America and Merrill Lynch would go back to being separate companies. And Goldman Sachs could no longer be a bank holding company.

But the Obama Administration doesn't agree with either Greenspan or Volcker. While it says it doesn't want another bank bailout, its solution to the "too big to fail" problem doesn't go nearly far enough. In fact, it doesn't really go anywhere. The Administration would wait until a giant bank was in danger of failing and then put it into a process akin to bankruptcy. The bank's assets would be sold off to pay its creditors, and its shareholders would likely walk off with nothing. The Treasury would determine when such a "resolution" process was needed, and appoint a receiver, such as the FDIC, to wind down the bank's operations.

There should be an orderly process for putting big failing banks out of business. But this isn't nearly enough. By the time a truly big bank gets into trouble -- one that poses a "systemic risk" to the entire economy -- it's too late. Other banks, competing like mad for the same talent and profits, will already have adopted many of the excessively-risky banks techniques. And the pending failure will already have rocked the entire financial sector.

Worse yet, the Administration's plan gives the big failing bank an escape hatch: The receiver might decide that the bank doesn't need to go out of business after all -- that all it needs is some government money to tide it over until the crisis passes. So the Treasury would also have the authority to provide the bank with financial assistance in the form of loans or guarantees. In other words, back to bailout. (Historical footnote: Summers and Geithner, along with Bob Rubin, while at Treasury in 1999, joined Greenspan in urging Congress to repeal Glass-Steagall. The four of them -- Greenspan, Summers, Rubin and Geithner also refused to regulate derivatives, and pushed Congress to stop the Commodity Futures Trading Corporation from doing so.)

Congress is cooking up a variation on the "resolution" idea that would give the Federal Deposit Insurance Corporation authority to trigger and handle the winding-down of big banks in trouble, without Treasury involvement, and without an escape hatch.

Needless to say, Wall Street favors the Administration's approach -- which is why the Administration chose it to begin with. If I were less charitable I'd say Geithner and Summers continue to bend over bankwards to make Wall Street happy, and in doing so continue to risk the credibility of the President, as well as the long-term financial stability of the system.

Wall Street could live with the slightly less delectable variation that Congress is coming up with. But Congress won't go as far as to unleash the antitrust laws on the big banks or resurrect the Glass-Steagall Act. After all, the Street is a major benefactor of Congress and the Street's lobbyists and lackeys are all over Capitol Hill.

The Street obviously detests the notion that its behemoths should be broken up. That's why the idea isn't even on the table. But it should be. No important public interest is served by allowing giant banks to grow too big to fail. Winding them down after they get into trouble is no answer. By then the damage will already have been done.

Whether it's using the antitrust laws or enacting a new Glass-Steagall Act, the Wall Street giants should be split up -- and soon.

October 25, 2009

It may seem somewhat arrogant and egotistical to write a blog about why I deserve the Nobel Prize. However, I will make my case as follows. In the nineteenth century the English utilitarians, Jeremy Bentham and John Stuart Mill, posited that society should be organized according to utility theory, the essence of which was the greatest possible good for the greatest possible number. It was assumed that everyone could measure his or her own personal utility for various options, and those individual utilities could be amalgamated to come up with an overall social utility. This work has been carried on to the present day by those trying to find an alternative to GDP, namely the Greatest Happiness Principal or Sarkozy's recent commission to come up with a better way to measure societal well-being than current methods.

In the 1950s Kenneth Arrow attempted to carry the English utilitarian political and economic theory to the next stage by mathematizing utility theory. He changed the name to social choice theory. Social choice theory encompassed both voting theory and economic theory. However, Arrow only succeeded in proving, supposedly, that social choice was impossible. In other words no one could come up with a social theory based on the greatest possible good for the greatest possible number. This gave capitalists a huge sigh of relief because it was considered to be a theoretical endorsement of capitalism. Also it reinforced the idea that direct democracy was impossible giving encouragement to the idea that representative democracy was the best you could do. For this Arrow received the Nobel prize for essentially proving that socialism or economic democracy and direct political democracy were both impossible. Arrow's Impossibility Theorem became famous. Conservatives were overjoyed.

But some pointed out that Arrow's Impossibility Theorem meant that solutions were impossible only in certain cases. In many other cases it was actually possible to find a solution. Therefore, Arrow's Impossibility Theorem only meant that a soloution was not possible in every case. Others pointed out that the Borda voting method came up with a solution in every case, and also that Arrow's analysis only applied to rank order preferences. Preferences that were indicated by real numbers on the real number axis (a measure of utilities over various options) also were exempt from Arrow's Impossibility Theorem. So then additional work was necessary in order to discredit the possibility that direct democracy and economic democracy were less than desirable. That work culminated with Gibbard and Satterthwaite who proved that any social system that was not impossible according to Arrow's Theorem was subject to being manipulated or gamed. Some individuals could strategize their inputs to the system in order to gain an unfair advantage over other participants. This again delegitimized the notion that direct democracy or economic democracy constituted viable alternatives to capitalism and representative democracy.

Recent work by Warren Smith has shown a method for optimal strategizing or gaming the system whether or not you have knowledge of how others will vote. His work is for voting systems based on a voting method called range voting which is essentially a formalization of the English utilitarians' idea of personal utility. I came up with the idea of range voting independently of Warren but I will give him the credit for it. Warren and I have both pointed out that range voting escapes Arrow's Impossibility Theorem, and I have pointed out that, by an extension, it escapes Gibbard and Satterthaite's proof that every social choice system is manipulable. This is easy to see if we take Warren's proof for the optimal way for an individual to strategize and just let the system itself apply that to every individual. Since it is up to the system to amalgamate all individual inputs, part of that process would be to make every input an optimally strategized input thus denying any unfair advantage to any individual and maximizing the potential of every individual input whether that input be a political vote or an economic alternative. I call this method Range-Approval Hybrid voting and it can be applied to economic systems as well.

Therefore, both Arrow's Impossibility Theorem and the Gibbard-Satterthwaite Manipulability Theorem have been overcome, and each participating individual can be assured that he or she can express his or her true utilities whether political or economic and no other individual can game the system in such a way as to gain an unfair advantage. Any individual who tries to game the system will either come out worse off or at least will not come out better off. Then the resultant social choice or utility will represent the best possible solution for a system that is unmanipulable and can't be gamed. There is a price to pay, however, in that a better solution might be found if it were assumed that everyone were completely honest in their expression of personal utility, but that price is relatively small in order to guarantee a stable system.

So the age old quest for a social system based on individual and social uitility has been found despite the fact that Arrow proved such a quest impossible and Gibbard and Satterthwaite proved that any system that escaped Arrow's Impossibility Theorem could be gamed. This opens up new vistas (previously thought to be closed) for forms of societal organization based on cooperation and promises to reduce conflicts and limited choices available under present poltical and economic systems. If Arrow received the Nobel Prize for proving that human progress was impossible in this realm, I deserve one for proving that that avenue of human progress is indeed still open.

Popular disgust over the fat premiums that financial executives bestow upon themselves is burgeoning, and rightly so. Those Wall Street piggy banks are filling up with billions upon billions of government-subsidized dollars.

But anyone infuriated by the grossly inflated compensation of the masters of finance should check out the incredible earnings of the top executives in the health insurance business. They’re among the most highly paid suits in the country—not owing to any skill in providing health care, which they don’t do, but because they have succeeded in denying care, quashing competition, driving up costs and winning federal subsidies for their companies.

Last year, WellPoint, the country’s largest health insurer, paid chief executive Angela Braly just under $10 million in salary, options and bonuses, along with the use of a private jet for herself and her family. That included a raise of about $750,000 over her 2007 salary.

UnitedHealth Group, the second largest, paid CEO Stephen J. Hemsley only $3.2 million last year, but in 2007 he took home $13.2 million. His biggest bonanza got away when he was forced by the Securities and Exchange Commission to surrender $190 million in falsely backdated stock options, but that was nothing compared with the nearly $1 billion in options that his predecessor was required to disgorge. The SEC declined to prosecute anyone for those frauds.

Meanwhile, the CEO of Aetna, Ronald Williams, earned $23 million in 2008, and the CEO of CIGNA, Edward Hanway, brought home a total of $120 million over the past five years, plus nearly $29 million in stock options.

Why are these insurance executives paid such obscene amounts? They might explain that they have improved the processing of claims and managing of risk—happy euphemisms for the notorious corporate practices of denying care wherever possible—or they might insist that their huge salaries reflect their challenging roles in a highly competitive marketplace.

But these companies actually exercise near monopolistic control of local insurance markets, which allows them to drive up costs and reduce access. That is the assessment of the American Medical Association, which has sponsored a series of large-scale studies of insurance markets across the country to determine whether excessive market power affects doctors and hospitals. The very notion of a competitive market and consumer choice is a sick joke in most American cities and towns, where a single health insurer predominates.

Those AMA findings amplified earlier studies dating back to 1995, which even then showed a clear trend toward concentration that has only grown worse. Over the past five years, the largest insurers have followed an imperial strategy of growth through merger and acquisition.

The buying binge has led to bloat, with WellPoint and UnitedHealth Group now covering more than 67 million individuals, or 36 percent of the total American insurance market. That is more than double the market share controlled by the two largest insurers in 2000, Aetna and United.

If the insurance executives get their way, this damaging consolidation will continue unchecked. When Braly isn’t complaining about potential competition from a public option provided by government, she tells shareholders that acquisition of smaller firms will continue to serve as “one of the key drivers of WellPoint’s future growth.”

The other significant “driver” of profitable growth for the insurance monopolies is the federally subsidized Medicare Advantage program, which overpays them by billions of dollars annually to compete with the traditional, government-run Medicare system. Originally billed as a way to reduce the cost of Medicare, that program has accomplished little except to improve the bottom line for the private insurers—and underwrite the excessive compensation of the Bralys and Hemsleys of the industry.

They blatantly curtail competition, lobby for federal subsidies, boost premiums, ration care and cut access, while insisting that a public option would cause all those terrible consequences. Obviously, they believe that the rest of us are chumps. And they may well be right.

If you want to understand the recent economic meltdown, you should see "The Warning" on Frontline. Watch it online here. It's about Brooksley Born, chairman of the Commodities Futures Trading Commission under President Clinton and how she tried to regulate derivatives, the chief cause of the crash and the recession. She was fought every step of the way by Fed Chairman Alan Greenspan, Treasury Secretary Robert Rubin and Clinton's economic advisor Larry Summers, the same Larry Summers who's advising President Obama now.

Now bank lobbyists are doing everything in their considerable power to prevent any regulation of derivatives even after the crash because there's just too much money in it for them, and they don't care if the economy crashes and burns again.

For the past thirty years we have minted billionaires, and we have created the most unequal distribution of wealth since 1928-29. This didn't happen by accident. We deliberately deregulated the financial sector and we deliberately eliminated the steep progressive taxes on the super-rich that had kept in check our income distribution.

By unleashing capital and finance we were supposed to get an enormous investment boom in real goods and services. Instead we got a fantasy finance boom as Wall Street marketed derivatives to those with excess capital.

We also got the biggest crash since the Great Depression.

Perhaps the most dramatic measure of our emerging billionaire bailout society is seen by comparing compensation for the top 100 CEOs and to that of average workers (the 100 million or so non-supervisory production workers). In 1970 the ratio was 45 to 1. By 2006 it was 1,723 to one.

Another critical feature of the billionaire bailout society is the creation of institutions that are too big to fail. Historically, our anti-trust division was supposed to prevent that. But it became another casualty of our grand deregulatory experiment. So financial institutions grew to the point where their failure would bring down our system. We tested that idea last fall when we let Lehman Brothers go under: It crashed global financial markets and moved us to the brink of a depression.

So in our billionaire bailout society we bail them out instead of breaking them up. We bail out all of them - not just the basket cases like A.I.G, Citigroup, GM etc. The popular media line is that once a financial institution repays TARP, it no longer is on government welfare. No so.

TARP is only one of the many government bailout programs that pours billions into the coffers of Goldman Sachs, JP Morgan Chase and, Morgan Stanley. Their bottom-lines and bonuses, for example, were fattened when we allowed A.I.G. to pay off its bets (with our money) at par value to these large financial institutions. Had A.I.G. gone under they all would have been on the edge of collapse.

So let's add it up: the $12.9 billion in A.I.G. help, the $10 billion in TARP, the F.D.I.C. guarantee program, the easy money trading distressed securities into the TALF program. I can't say for sure how much of the $16 billion the firm has set aside for bonuses can be attributed to government assistance of one form or another. But it's got to be a fairly substantial amount -- at least $2 billion or $3 billion.

And that's a very conservative estimate. It might be the case that the entire bonus pool is equal to the subsidies pulled in from taxpayer support. But this is to be expected in our billionaire bailout society.

Perhaps the most damaging feature of our billionaire bailout society is the "jobless recovery." This oxymoron refers to an economy that is growing, but that can't produce nearly enough jobs to reach full employment (an unemployment rate below 5 percent). Our current jobless recovery will be the worst ever. Right now the BLS (U6) jobless rate stands at 17.0 percent -- and climbing. (This counts those without work plus those who have part-time jobs because they can't find full-time work.) If the billionaire bailout society becomes permanent, we may never see full employment again.

Why is that? Because you don't need a full employment society to mint billionaires. Reflect for a moment on Goldman Sachs. They do not have individual depositors. They are not public brokers. They do not make loans to small business. They are in the business of making money by playing the financial markets, from mergers and acquisitions, from trading, and from creating and selling fantasy finance instruments.

In our billionaire bailout society these are unquestioned positive activities. But what value do they produce in the real economy? What is their contribution to market efficiency? How do they lower the cost of capital? How do these activities create jobs in the real economy? Good luck answering those questions because they don't do any of that. They just make money for themselves while producing little or no value to our society.

It's obvious we need to break up these large institutions so that we won't have to bail them out the next time around -- which may come sooner than expected given the lack of jobs and the fact that the financial casino is open again.

But we can't solve the bailouts without addressing the billionaire part of the equation.

Two years ago the richest 400 Americans had a combined wealth of $1.57 trillion. Last year during the crash their wealth dropped to "only" $1.27 trillion. Now they are set to rise again. We need to tie their wealth of our richest to putting our people back to work.

Here's the simplest and most controversial approach: a 10 percent wealth tax on all those with more than $500 million -- until unemployment drops below 5 percent. The money collected would come to about $150 billion a year. That money should be directly invested in public works programs to put our people to work -- a Green Corps to weatherize every home and office in the country -- a Youth Corps to provide work for unemployed high school and college graduates.

(I realize that many Americans detest the idea of taxing anyone's assets, even billionaires'. But let's be realistic: That's where our society's wealth has gone and we need that wealth to put people back to work. Some billionaires do create large numbers of jobs, but not enough. They can contribute more and not feel a bit of pain or suffering.)

To break away from the billionaire bailout society we need to tie the creation of wealth to the creation of work. We no longer have a system that can produce an adequate number of jobs through the normal working of the business cycle. The invisible hand of the market just won't do it. That's why it's called a jobless recovery. We need direct intervention.

But more importantly, we need to end our pell-mell slide into the billionaire bailout society in which everyone is out for themselves. We need to pull together to create a full employment society that can tackle our most pressing needs. Billionaires, no matter how thoughtful, kind, generous and inventive, can't do that for us.

We once understood that the common good required full employment. We once understood that the common good was more precious than individual riches. We once believed that public service to achieve such goals was a high calling. I hope that spirit still lies within us.

It's a conversation that is desperately needed as the economic crisis continues to devastate low- and middle-income Americans in spite of President Obama's and Congress' efforts to stop the bleeding by throwing trillions of dollars at the banks. Democracy Now! recently reported that while the Dow Jones topped 10,000 for the first time in a year, foreclosures have reached a record level of 940,000 in the third quarter. But with this film airing in major chain cinemas across the nation, the normally taboo topics of how wealth is divided, who owns Congress, and how vital economic decisions are made are now open for discussion in a way they haven't been in the U.S. for decades.

In Capitalism, Michael Moore features the reality of the economic crisis for America's usually-invisible poor and working class. The movie begins with a family filming their eviction from their own home. In a terrifying scene, we watch from inside their living room window as 7 police cars roll up to throw the ill-fated family onto the street for failing to make their payments. Moore explained in an interview, "You see [a foreclosure] really for the first time from the point of view of the person being thrown out of the house." This same bottom-up viewpoint carries the audience through the rest of the film, from the stories of kids in Pennsylvania sent to private detention centers for minor offenses by judges who received kickbacks from the prison company, to airline pilots whose wages are so low they have to go on food stamps.

By grounding the viewers in the human costs of out-of-control capitalism, Moore finds firm footing for launching his attacks on the

Wall St.firms who he believes are responsible for this crisis. As the film points out, the richest 1% of Americans now control more wealth than the bottom 95%, a sorry state of affairs that has grown steadily worse since the 1980s. Ronald Reagan, Alan Greenspan, and his two buddies Larry Summers and Robert Rubin are implicated in Capitalism as responsible parties behind the gutting of regulations and the deliverance of the federal government into the hands of the bankers.

Michael Moore's conversations with congressmen and women about the $700 billion bank bailout passed last October best illustrate this transfer of sovereignty. The congresspeople are remarkably candid in their dismay at what was essentially a blank check to Goldman Sachs, Bank of America and Citigroup. Representative Baron Hill from Indiana recounts that the bailout bill was pushed through Congress in a similar manner as the Iraq War authorization, under threat of catastrophe and terror. Marcy Kaptur, congresswoman from Ohio, however, does one better. "This was almost like an intelligence operation," she laments. And when Moore asks her if the bailout represents a "financial coup d'etat" by the bankers, she responds, "I could agree with that. Because the people here [pointing to the Capitol] really aren't in charge. Wall Street is in charge."

We also witness Kaptur's courageous honesty on the floor of the House, urging Americans to resist foreclosure by remaining in their homes. Detroit sheriff Warren Evans stands out as another hero in the film when he announces he will cease foreclosure evictions in his jurisdiction because of the damage to the community caused by making more houses vacant and more families homeless. Moore also features grassroots organization Take Back the Land, which has dramatically responded to the crisis by moving evicted families back into their homes in the Miami area.

Regular folks fighting back against a system that is depriving them of income, housing, health care and other basic needs is inspiring stuff to watch, and it's not something we're used to seeing up on the big screen. Capitalism displays this grassroots defiance surprisingly well by humanizing those on the bottom of the pyramid. One man whose farm is foreclosed angrily warns, "There's got to be some kind of rebellion between people who've got nothing and people who've got it all." His words are buttressed by a behind-the-scenes look at Republic Windows & Doors, where laid-off workers occupied their Chicago factory and refused to leave until receiving their promised severance pay. For Moore this represents the kind of direct action that everyday people must now begin to take to protect themselves from having to pay for the misdeeds of the wealthiest one percent.

This call to action is well taken. However, one piece lacking in the film's analysis of capitalism is how the system of economic power interlocks with other structures of oppression, for example U.S. imperialism, patriarchy and white supremacy. Capitalism affects different people in extremely different ways, and while some fear losing their jobs, others fear imprisonment, rape, or even being hit by a drone attack. But Michael Moore seems to avoid a conversation about racism, sexism and homophobia in order to appeal to a mythical homogeneous American working class. And besides a brief comparison to Rome, the movie also shies away from discussing the U.S. role in the world and how a militaristic foreign policy serves the interests of corporate and financial elites - even though opposition to the wars in Afghanistan/Pakistan and Iraq have never been greater.

Another weakness is how Moore handles Barack Obama with kid gloves. Even while his economic advisers are skewered in the film, President Obama's role in the bank bailouts is downplayed, and he comes out looking like a champion of the people, or at least a potential champion. In this respect Michael Moore bestows honors like the Nobel Committee, not so much for what the president has done, but for the "hope" of what he might do.

So what does Michael Moore propose as an alternative to capitalism? Not socialism, but a kind of economic democracy - an opportunity for average folks to have a say in how their money is used, from the workplace on up to the government. Moore takes us inside co-ops in America where workers vote on decisions about finances democratically, and where salaries are equal and adequate for everyone in the company. In one factory, assembly line workers and the CEO each make about $60,000.

To reinforce his economic prescription, Moore even dug through archives to recover lost footage of FDR's long-forgotten proposal for a "Second Bill of Rights," which called for guaranteeing meaningful work and a living wage, decent housing, adequate medical care, and a good education for every American. It is striking how such common-sense ideas in our current political climate appear dangerously radical, even coming from the lips of a U.S. president. It seems the overriding purpose of Capitalism: A Love Story is to flip these expectations on their heads. For Michael Moore, guaranteeing basic economic security is as American as apple pie; what is radical is a system that would deny such prosperity to bolster the wealth of a tiny few.

If there is to be any solution to the economic crisis that doesn't involve millions more people thrown out of their homes or dropped from their health care, it will have to involve a sharp break from a system that values private profits higher than meeting people's basic needs. To this end, Michael Moore has done a great public service by making a film that is essentially an invitation for views outside the bounds of established mainstream discourse to propose what might be done about the economic quagmire we now find ourselves in. It is time for an American Left to come out of the wilderness and speak out with proposals for better ways of organizing our economy.

October 24, 2009

Lloyd Blankfein, chairman and CEO of Goldman Sachs, during an interview in New York City.

Faith in Corporate America and its doctrine of "free enterprise" have been tanking for the past year or more. Some 15 million people remain out of work, and the jobless rate, which hit 9.8% in September, is still rising.

The richest 1% of the nation is now hauling in 23% of the national income, a bigger share than the bottom half of the population, which is now mired in insecurity and even desperation.

That sense of despair comes in large part from the feeling that few, if any, powerful voices are speaking up forcefully in the name of Americans whose factories have been shut down and whose voice in society has been shut out.

The Obama administration, unable to take bold steps for reform, instead relies ever more heavily on Wall Streeters like Treasury Secretary Timothy Geithner, Lawrence Summers and Steven Ratner to create a sense of financial stability. The New York Timesspelled out Geithner's record with unusual frankness:

An examination of Mr. Geithner's five yearsas president of the New York Fed, an era of unbridled and ultimately disastrous risk-taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Street's giant financial institutions.

His actions, as a regulator and later a bailout king, often aligned with the industry's interests and desires, according to interviews...

Those at the top of the economic pyramid seem to feel more confident than ever about retaining every important feature of the old order. After all, the Dow has hit 10,000 again, and Wall Streeters stand to collect record bonuses even higher than 2007.

The bankers, led of course by Goldman Sachs, intend to permit only the most token reforms on executive compensation and the deregulated policies that produced the great meltdown.

Indeed, why change anything? After all, Goldman Sachs' pool of cash for bonuses is on track to reach nearly $23 billion by the end of the year. "In 2007, Wall Street's previous record year, Goldman CEO Lloyd Blankfein took home $68 million. In 2008, 212 Goldman Sachs power suits stuffed their pockets with over $3 million each," reports Sam Pizzigatti, in his invaluable newsletter Too Much.

“How is it possible that the year after billions of taxpayer dollars helped companies like Goldman Sachs return to financial health, this company shows absolutely no restraint? Goldman Sachs is poised to become the poster child of the company that drives income disparity in the United States" said Laura Berry, executive director of Interfaith Council on Corporate Responsibility, while introducing a new shareholder challenge against excessive executive pay at Goldman Sachs.

Nonetheless., Barney Frank—whom many of us had counted on to champion the little guy as chair of the House Banking Committee—is backing off on many key reforms in banking, disappointing groups like Americans for Financial Reform.

Frank's chief concern these days: not wishing to discourage "financial innovations," i.e. the kind of exotic, wealth-destroying instruments that drain the real productive economy and keep us vulnerable to more meltdowns.

Meanwhile, the nation's "pay czar" Kenneth Feinberg supposedly cracked down on Kenneth Lewis of Bank of America by forcing him to cough up his 2008 salary of $1.5 million, a cruel punishment so harsh that Lewis will be fored to retire with a package of a mere $69.5 million.

Federal health "reform" legislation, without a strong public option that has the clout of Medicare to negotiate prices, would be unthinkable if America had not evolved into what an internal Citbank memo called a "plutonomy" where the super-rich monopolize the benefits of our economy and thoroughly dominate what the elected government is permitted to discuss in the name of reform.

Nor would such pathetic gestures at health and financial reform be tolerated if Americans had a deeper sense of the economic rights they should hold as American citizens.

Among all the surprisingly subtle touches in Michael Moore's new documentary, Capitalism: A Love Story, none impressed me more than the film's segment on Franklin Roosevelt's "Economic Bill of Rights." (University of Chicago law professor Cass Sunstein devoted an entire book to FDR's concept, but Moore's film provides a much more inspirational account.)

FDR, already in declining health, delivered a "State of the Union" speech via radio in January 1944 that is one of America's most important public addresses. He intoned that political democracy was imperiled by a lack of economic democracy and an absence of economic security:

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty...

As our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.

We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.

He went on to enumerate the rights for which he envisioned a consensus emerging in America:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

FDR held out a very different vision from our current "plutonomy," in which nearly all the economic gains, power and security are held by the few. He finished:

All of these rights spell security...

America’s own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens.

Unfortunately, FDR's Economic Bill of Rights never was "carried into practice," and is far from accepted—most notably by many top Democrats.

Given where we are and where we're headed, FDR's 1944 speech ought to be urgently required reading for President Obama—after he banishes Geithner, Summers, Ratner and the other free-marketeers to the unemployment line.

October 23, 2009

Why Wall Street Reform is Stuck in Reverse

At a conference in London, a Goldman Sachs international adviser, Brian Griffiths, praised inequality. As his company was putting aside $16.7 billion for compensation and benefits in the first nine months of 2009, up 46 percent from a year earlier, Griffiths told us not to worry. “We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” he said.

Eight months ago it looked as if Wall Street was in store for strong financial regulation -- oversight of derivative trading, pay linked to long-term performance, much higher capital requirements, an end to conflicts of interest (i.e. credit rating agencies being paid by the very companies whose securities they're rating), and even resurrection of the Glass-Steagall Act separating commercial from investment banking.

Today, Congress is struggling to produce the tiniest shards of regulation that would at least give the appearance of doing something to rein in the Street.

What happened in the intervening months? Two things. First, America's attention wandered. We're now focusing on health care, Letterman's frolics, and little boys who hide in attics rather than balloons. And, hey, the Dow is up again. The politicians who put off Wall Street regulation for ten months knew that the public would probably lose interest by now.

Second, the banks keep paying off Congress. The big guns on Wall Street increased their political donations last month after increasing their lobbying muscle. Morgan Stanley's Political Action Committee donated $110,000 in September, for example, of which Democrats got $43,000.

Official Wall Street PAC donations are piddling compared to the tens of millions of dollars that Wall Street executives dole out to candidates on their own (or with a gentle nudge from their firms). Remember -- the Street is where the money is. Executives and traders on the Street have become the single biggest sources of money for Democrats as well as Republicans. And with mid-term elections looming next year, you can bet every member of Congress has a glint in his or her eye directed at the Street.

That's why the President went to Wall Street to raise money Tuesday night, gleaning about $2 million for the effort. He politely asked the crowd to cooperate with reform -- “If there are members of the financial industry in the audience today, I would ask that you join us in passing necessary reforms" -- but those were hardly fighting words. It's hard to fight people you're trying to squeeze money out of.

Which is the essential problem.

Ken Feinberg, the President's "pay czar" came down hard on executive pay yesterday, for those banks still collecting money under TARP, as well he should. But Feinberg isn't trying to pass new financial reform legislation, and TARP no longer covers several of the biggest banks with the highest pay and bonuses -- although they're still getting subsidized by the government with low-interest loans.

Wall Street and the Treasury want us to believe that the TARP money will be repaid to taxpayers, but Neil Barofsky, the special inspector general keeping watch over TARP, said yesterday that just 17 percent of the TARP money has been repaid, and “[i]t’s extremely unlikely that taxpayers will see a full return on their investment." Later he told a reporter that it's unlikely "we'll get a lot of our money back at all."

Brian Griffiths, the Goldman international adviser who told us inequality is good for us, doesn't know what he's talking about. America is lurching toward inequality once again, led by the financial industry. The Street is back to where it was in 2007, but most of the rest of us are poorer than we were then -- largely due to the meltdown that occurred because Wall Street overreached. The oddity is that we bailed out the Street, including Griffiths and his colleagues, but apparently won't even be repaid.And now that Griffiths et al knows his firm and the other big ones on the Street are too big to fail, he and his colleagues will make even bigger gambles in the future with our money.

October 22, 2009

Michael Moore's Action Plan: 15 Things Every American Can Do Right Now

You've Seen the Movie -- Now It's Time to ACT!

by Michael Moore

Friends,

It's the #1 question I'm constantly asked after people see my movie: "OK -- so NOW what can I DO?!"

You want something to do? Well, you've come to the right place! 'Cause I got 15 things you and I can do right now to fight back and try to fix this very broken system.

Here they are:

FIVE THINGS WE DEMAND THE PRESIDENT AND CONGRESS DO IMMEDIATELY:

1. Declare a moratorium on all home evictions. Not one more family should be thrown out of their home. The banks must adjust their monthly mortgage payments to be in line with what people's homes are now truly worth -- and what they can afford. Also, it must be stated by law: If you lose your job, you cannot be tossed out of your home.

2. Congress must join the civilized world and expand Medicare For All Americans. A single, nonprofit source must run a universal health care system that covers everyone. Medical bills are now the #1 cause of bankruptcies and evictions in this country. Medicare For All will end this misery. The bill to make this happen is called H.R. 3200. You must call AND write your members of Congress and demand its passage, no compromises allowed.

4. Each of the 50 states must create a state-owned public bank like they have in North Dakota. Then congress MUST reinstate all the strict pre-Reagan regulations on all commercial banks, investment firms, insurance companies -- and all the other industries that have been savaged by deregulation: Airlines, the food industry, pharmaceutical companies -- you name it. If a company's primary motive to exist is to make a profit, then it needs a set of stringent rules to live by -- and the first rule is "Do no harm." The second rule: The question must always be asked -- "Is this for the common good?" (Click here for some info about the state-owned Bank of North Dakota.)

5. Save this fragile planet and declare that all the energy resources above and beneath the ground are owned collectively by all of us. Just like they do it in Sarah Palin's socialist Alaska. We only have a few decades of oil left. The public must be the owners and landlords of the natural resources and energy that exists within our borders or we will descend further into corporate anarchy. And when it comes to burning fossil fuels to transport ourselves, we must cease using the internal combustion engine and instruct our auto/transportation companies to rehire our skilled workforce and build mass transit (clean buses, light rail, subways, bullet trains, etc.) and new cars that don't contribute to climate change. (For more on this, here's a proposal I wrote in December.) Demand that General Motors' de facto chairman, Barack Obama, issue a JFK man-on-the-moon-style challenge to turn our country into a nation of trains and buses and subways. For Pete's sake, people, we were the ones who invented (or perfected) these damn things in the first place!!

FIVE THINGS WE CAN DO TO MAKE CONGRESS AND THE PRESIDENT LISTEN TO US:

1. Each of us must get into the daily habit of taking 5 minutes to make four brief calls: One to the President (202-456-1414), one to your Congressperson (202-224-3121) and one to each of your two Senators (202-224-3121). To find out who represents you, click here. Take just one minute on each of these calls to let them know how you expect them to vote on a particular issue. Let them know you will have no hesitation voting for a primary opponent -- or even a candidate from another party -- if they don't do our bidding. Trust me, they will listen. If you have another five minutes, click here to send them each an email. And if you really want to drop an anvil on them, send them a snail mail letter!

2. Take over your local Democratic Party. Remember how much fun you had with all those friends and neighbors working together to get Barack Obama elected? YOU DID THE IMPOSSIBLE. It's time to re-up! Get everyone back together and go to the monthly meeting of your town or county Democratic Party -- and become the majority that runs it! There will not be many in attendance and they will either be happy or in shock that you and the Obama Revolution have entered the room looking like you mean business. President Obama's agenda will never happen without mass grass roots action -- and he won't feel encouraged to do the right thing if no one has his back, whether it's to stand with him, or push him in the right direction. When you all become the local Democratic Party, send me a photo of the group and I'll post it on my website.

5. Start your own media. You. Just you (or you and a couple friends). The mainstream media is owned by corporate America and, with few exceptions, it will never tell the whole truth -- so you have to do it! Start a blog! Start a website of real local news (here's an example: The Michigan Messenger). Tweet your friends and use Facebook to let them know what they need to do politically. The daily papers are dying. If you don't fill that void, who will?

FIVE THINGS WE SHOULD DO TO PROTECT OURSELVES AND OUR LOVED ONES UNTIL WE GET THROUGH THIS MESS:

3. Do not invest in the stock market. If you have any extra cash, put it away in a savings account or, if you can, pay down on your mortgage so you can own your home as soon as possible. You can also buy very safe government savings bonds or T-bills. Or just buy your mother some flowers.

4. Unionize your workplace so that you and your coworkers have a say in how your business is run.Here's how to do it (more info here). Nothing is more American than democracy, and democracy shouldn't be checked at the door when you enter your workplace. Another way to Americanize your workplace is to turn your business into a worker-owned cooperative. You are not a wage slave. You are a free person, and you giving up eight hours of your life every day to someone else is to be properly compensated and respected.

5. Take care of yourself and your family. Sorry to go all Oprah on you, but she's right: Find a place of peace in your life and make the choice to be around people who are not full of negativity and cynicism. Look for those who nurture and love. Turn off the TV and the Blackberry and go for a 30-minute walk every day. Eat fruits and vegetables and cut down on anything that has sugar, high fructose corn syrup, white flour or too much sodium (salt) in it (and, as Michael Pollan says, "Eat (real) food, not too much, mostly plants"). Get seven hours of sleep each night and take the time to read a book a month. I know this sounds like I've turned into your grandma, but, dammit, take a good hard look at Granny -- she's fit, she's rested and she knows the names of both of her U.S. Senators without having to Google them. We might do well to listen to her. If we don't put our own "oxygen mask" on first (as they say on the airplane), we will be of no use to the rest of the nation in enacting any of this action plan!

I'm sure there are many other ideas you can come up with on how we can build this movement. Get creative. Think outside the politics-as-usual box. BE SUBVERSIVE! Think of that local action no one else has tried. Behave as if your life depended on it. Be bold! Try doing something with reckless abandon. It may just liberate you and your community and your nation.

Finally, a use has been found for the music of Nine Inch Nails, Rage Against the Machine and Britney Spears: torturing prisoners at Guantanamo. I can't imagine a worse form of torture! The New York Philharmonic should join this suit by prominent rock musicians to get records released under the Freedom of Information Act as to which music exactly was used to torture the prisoners.

Musicians Demand Records On Bush Administration's Use Of Music For Torture

by Sam Stein

A group of prominent musicians are joining a campaign to close Guantanamo Bay and demanding the release of records about what music was used during the potential torture of detainees there and at other facilities.

Some of the more famous names in the music industry are formally lending their prestige to an effort being led by retired generals, progressive groups and a former member of Congress to shut GITMO down. The list includes Trent Reznor of Nine Inch Nails, Tom Morello of Rage Against the Machine, R.E.M., Pearl Jam, Jackson Browne, Rise Against, Rosanne Cash, Billy Bragg and the Roots, all of whom are joining the broader National Campaign to Close Guantanamo which was launched earlier in the week.

Hoping to cast further light on the potential illegalities that took place at the detention facility, the group is also working to obtain records about why and how music was used (under laws authorized by the Bush administration) to effectively torture suspected terrorists. The musicians have officially endorsed a Freedom of Information Act request for the declassification of all secret government records pertaining to music utilized during interrogations. At least two members of the coalition, Reznor and Morello, have had their music linked to interrogations.

"Guantanamo is known around the world as one of the places where human beings have been tortured -- from water boarding, to stripping, hooding and forcing detainees into humiliating sexual acts -- playing music for 72 hours in a row at volumes just below that to shatter the eardrums," said Morello, in a statement provided by the NCCG. "Guantanamo may be Dick Cheney's idea of America, but it's not mine. The fact that music I helped create was used in crimes against humanity sickens me -- we need to end torture and close Guantanamo now."

The National Security Archives will be officially filing the FOIA request on behalf of the National Campaign to Close Guantanamo (NCCG).

The FOIA request comes on the heels of a renewed effort on behalf of the NCCG and others to compel Congress to complete GITMO's closure. The group launched a national ad campaign earlier in the week, in which it argued that the continued operation of the detention facility was undermining America's reputation in the world community and Congress' standing as a legislative body.

That spot, as well as the broader NCCG effort, was put together by retired Generals Robert Gard, John Johns, as well as former member of Congress, Tom Andrews (D-Maine), and Vote Vets Chairman and Iraq War veteran, Jon Soltz, all of whom have been vocal critics of the use of GITMO to house suspected terrorists. The Obama administration has echoed the campaign's concerns. But they have also all but conceded that the facility will not be shut down in the 2009 calendar year.

The decision behind issuing a FOIA request for additional information actually took root well before the National Campaign to Close Guantanamo came to fruition. Working with the New York University School of Law's Center for Human Rights and Global Justice, Trevor FitzGibbon -- a well-known progressive communications adviser -- began looking into the use of music as an interrogation method on terrorist suspects. Over the course of six months the idea of putting a microscope on this sliver of interrogation policy festered until he brought it to others who were pushing to shut GITMO down. FitzGibbon, who is doing much of the public relations work for the NCCG, was able to recruit musicians to the cause due, in part, to his past work with the industry on other political issues.

The FOIA, which is officially being distributed on Thursday, will be sent to the Department of Defense, the Department of the Army, the U.S. Southern Command, U.S. Central Command, U.S. Joint Forces Command, U.S. Army Special Forces Command, DOA Criminal Investigative Task Force, Defense Intelligence Agency, Federal Communications Commission, FBI, CIA, and the Department of Justice.

It requests "all documents, including but not limited to intelligence reports, briefings, transcripts, talking points, meeting minutes, memoranda, cables, audio/visual recordings and emails produced by the Central Intelligence Agency concerning the use of loud music as a technique to interrogate detainees at U.S.-operated prison facilities at Guantanamo, Iraq and Afghanistan during 2002-the present."

The use of jarring music during the interrogation of suspected terrorists has been reported in many works documenting the authorization of torture during the Bush administration. At least 20 declassified documents currently exist that reference the use of "loud" music to "create futility" in uncooperative detainees. Among the artists whose music is believed to have been used include Metallica, Britney Spears, the Drowning Pool, Eminem, Bruce Springsteen and the Bee Gees.

Not all of these bands and musicians signed on to the NCCG FOIA. But others, whose music was not reportedly used, did so out of philosophical objections.

"We have spent the past 30 years supporting causes related to peace and justice," read a statement from REM, "to now learn that some of our friends' music may have been used as part of the torture tactics without their consent or knowledge, is horrific. It's anti-American, period."

Added the hip-hop band The Roots: "When we found out that music was being used as part of the torture going on at Guantanamo, shackling and beating people -- we were angry. Just as we wouldn't be caught dead allowing Dick Cheney to use our music for his campaigns, you can be damn sure, we wouldn't allow him to use it to torture other human beings. Congress needs to shut Guantanamo down."

October 21, 2009

So far the Obama administration's approach to economic recovery has been to reinflate the bubble whose burst caused the collapse in the first place. Wall Street has been made whole thanks to trillions of dollars of bailouts from the taxpayers and the Fed. They in turn are returning to business as usual fighting any attampt by the Obama administration to regulate them or rein them in. Unabashedly and unchastized, they are proceeding to give each other $150 billion in bonuses larger then any bonus pool even before the collapse. They use their taxpayer bailouts to lobby Congress not to regulate them. In particular they don't want derivatives regulated even though it was unregulated derivatives that caused the crash.

So rather than any real reform, the net effect is just to return the US to where we were before one of the most disastrous economic calamities in history with no reforms in place that could mitigate against the same thing happening again. In fact Wall Street doesn't care if the same thing happens again because they made billions before it happened, billions after it happened and they are on track to making billions more even if that leads to its happening again. Consider the fact that if you're a young aspiring investment banker who hasn't made his millions yet and you've decided to make your career on Wall Street, and then you're told 'sorry, the rules have changed and you will not be able to make the millions that you thought you were going to make.' You'd be very disappointed. In fact the drive to make the kind of money that last year's Wall Streeters made is virtually limitless. People who have been used to being Masters of the Universe and making obscene amounts of money and people starting out on Wall Street who are in a position and aspire to make obscene amounts of money will do virtually anything to keep the same system in place that will allow them to do so regardless of whether or not that will lead to another breakdown or collapse of the world economy. They know from experience that governments will simply bail them out again.

And they know that they are more powerful than the Obama administration or any reform movement. They have hundreds of millions to lobby Congress and fight against any reform of the system that might cause a diminution of their profits. So they are going back to business as usual. The conventional wisdom that, if Wall Street recovers, Main Street will not be too far behind has been totally discredited. When is the Obama administration going to wake up and smell the coffee that it has been government policy for the last 30 years to screw the average middle class worker? It has been government policy to encourage the off shoring of jobs and the offshoring of profits. It has been government policy to deregulate the financial system and hence to encourage wild speculation and unsafe banking practices. It has been government policy to encourage mergers and acquisitions to the point that we have banks that are too big to fail, and they are even bigger today than they were before the meltdown.

Obama's strategy has been to reinflate the bubble in order to bring us back from the brink of total financial collapse and then to reregulate the big banks and then to do something about jobs and the middle class. Unfortunately, this strategy doesn't seem to be working. The banks are fighting back tooth and nail, and the Republicans are fighting any expenditure of funds that would create jobs or help the middle class. So Obama is reduced to tinkering around the edges and allowing the Republican strategy of delay and defeat to work. The longer the Republicans can delay any meaningful reforms, the longer they can delay any meaningful accomplishments, the greater are their chances to defeat Obama in the next election, the greater are their chances to deny the Democrats majorities in Congress in 2010.

It looks like Obama may get a victory in health care reform, but at the price of six months of his administration's time in office, six months during which he has not been able to focus on the next problem, and there are several problems out there he must solve if he is to be reelected and if the Democrats are to be reelected. The next big problem is jobs. Starting next year he must focus full time on job creation or he's a goner. I predict that he will have a victory in health care, but it will be short-lived unless he can solve the jobs problem which is even more intractable. Health care reform didn't require any immediate expenditures; job creation inevitably will, but there is no money for it. The Republican strategy of running the government into debt so that the Democrats will not be able to initiate social programs has been successful to the extent that Obama is hemmed in by the largest government deficits in human history compounded by the fact that so much money has been used to bail out the banks which are only returning to the same practices that caused the financial collapse in the first place.

It is hard to see how Obama climbs out of this hole. And the American electorate is so fickle that it is hard to see how they will reelect Obama and the Democrats if Obama does not successfully address the jobs creation problem. When FDR did it during the Great Depression, he had no effective Republican opposition. When Obama attempts to do something about jobs, he will have every right wing pundit and Republican Congressman screaming out against him. He will have Republican filibusters galore. He will have Blue Dog Democrats whom he can't count on in a pinch. It's hard to see how he will be successful in a major way under these conditions. It's as if the power of money in terms of campaign contributions, lobbyists, TV ads and right wing media is greater than the power of the American government, and their goal is to control the American government in their interests.

Republicans are just waiting their turn to take power again, and then they'll be off to the races in decimating the American middle class while claiming to support middle class values. They will be off to the races in reducing middle class programs like social security and medicare. They will let help for the poor and homeless dry up due to lack of funding while continuing to spend enormous sums on war and the military industrial complex. They will continue to support policies designed to extract money from the middle class and the poor whether in the form of health insurance premiums or in terms of credit card fees and exhorbitant interest rates. They will turn the middle class into a nation of debt slaves and peons. They will "reform" the bankruptcy laws so that the middle class will be saddled with debt their entire lives, debt which they have no hope of escaping. And the American electorate will play into their hands due to their dissatisfaction with Obama who could only do so much with the deck stacked against him.

Between the two years I spent at Stanford getting an MS in Electronic Engineering, I worked a summer at Lawrence Livermore. Similar to my experience at Picatinny Arsenal, I wasn't given much of anything to do so my work experience wa totally boring. Sure I got a paycheck and this helped with college expenses, but I learned nothing and I contributed nothing. I was left to my own devices. I rode my motorcycle to work every day from an apartment I shared in Hayward. In my spare time I started taking flying lessons at Livermore Airport. To my knowledge I wasn't part of any project at Lawrence Livermore. The funding was there to pay me, and besides that no one seemed to be interested to make use of my skill set or my work ethic. Still I had to be there during normal working hours and look busy. I think this was just a recruiting tool as they did seem to be interested in hiring Stanford graduates. Of course, when I did graduate the next year, I wasn't interested in going to work at such a drab, dull boring place as Lawrence Livermore.

My guess is that there was a core of qualified scientists and engineers who did "real" work while everyone else was just padding. Department heads were under pressure to bring in the money from the Pentagon and Congress and to justify their continued existence. So they had to invent "programs" and sell somebody in a position in Washington to dole out money that their program should be funded. Certain channels were established and certain doler outers in the Pentagon and Congress could be counted upon to keep the good ole Radiation Lab going and even growing. Since it was civil service the cost plus contract didn't come into play, but competition for funding to keep an expanding number of engineers on the payroll continued on a daily basis. Department heads were essentially salesmen whose job was to sell the Washingtonians on projects which essentially went nowhere and were no coherent part of any overall defense strategy. These projects and departments had a life of their own, and their funding had the purpose mainly of keeping middle class engineers in their jobs and on the payroll until they could comfortably retire. The more successful department heads were in bringing home the bacon, the higher they advanced on the civil service ladder and pay scale.

I can't say my experience at Lawrence Livermore was memorable. I don't remember any fellow employees, supervisors or anyone at that facility. I don't remember any project or work content of anything I was supposed to be a part of or any work assignments whatsoever. It was just a boring summer job to be gotten through until I could start my second year at Stanford and finish my Master's Degree. After I had almost graduated, I started applying for regular jobs as I didn't want to continue to get a PhD at Stanford. Actually, I hadn't done very well on the oral exams which wasn't encouraging, but after I had made up my mind to leave, my research advisor, John Shaw, actually wanted me to stay. At Stanford I had to work 23 hours a week in the Microwave Lab to fulfill the requirements of my research assistantship which paid for my tuition and room and board. So I interviewed IBM and some other companies. IBM had me take some tests in San Francisco, and I must have done well on them because they were hot for my bod. I had already decided I didn't want to go to work for IBM because I had read that they ordered every aspect of your life telling you what books to read and what clubs to join etc. That wasn't for me.

I decided to take a job offer in San Diego with General Dynamics in the Electromagnetic Compatibility Group. I was attracted to San Diego because it seemed to be the opposite of everything I grew up with in New Jersey. It was California Dreaming - sun, beaches, girls. I put little thought into the fact that General Dynamics was a major defense contractor. My political awareness hadn't reached a very high level at that point, and I was led to believe that GD was in the business of space exploration. After all they had the Atlas rocket and the Convair spacecraft. It seemed like an interesting job where I could do some interesting work, and in my particular case it did work out that way. I had some interesting researchy projects to work on. I got along well with the other employees in my little group, and I liked my supervisor, Ben Weinbaum. Little did I know at the time of all the shenanigans involved in all the behind the scenes machinations of General Dynamics as a major player in the military industrial complex. There was plenty of make work, plenty of boondoggles, plenty of cost plus funding for projects that went nowhere and replicated projects elsewhere that did have some relevance.

Again I observed the phenomenon that certain groups seemed to hire more employees than other groups even though the technology they embodied didn't seem to merit their prominence. These groups and departments, it turned out, had the best salesmen as group heads and department heads. They spent most of their time in Washington selling Congress and the Pentagon on the need to fund their particular projects. Those projects always required expanding the employee base for that group or department, and that added to the cost of the project. Of course, these projects were all cost plus so the plus part, the profit, went directly to company headquarters where it was shared by the CEO, senior executives and shareholders. Whether or not any particular project contributed to the actual defense or actual advance of any bonafide or legitimate interest of the US was irrelevant. What was pertinent was the sales ability of middle management, and their customer was the US military top brass in the Pentagon and Congressmen who had their own little stashes of cash to dole out.

After a few years at GD Convair, it became apparent that there was no real chance of advancement. If I was lucky I could work there till I retired. If not, I would be shuffled around from plant to plant -wherever there was an ongoing contract that could support more workers. As it turned out, it wasn't too many more years until the whole division was shut down. I guess that's when they figured out that the Centaur rocket didn't serve any real purpose. However, I left GD before that happened. I decided to go back to school at UCSD in the Applied Electrophysics Department under a program where I could still remain an employee at GD and supposedly return there after I got my degree. The best part was that I could work summers at GD at my regular salary and that I didn't have to leave San Diego.

UCSD was practically begging for graduate students. They gave me a research assistantship which paid my bills, and the summer job at GD supplemented my income. UCSD didn't even require me to work for my assistantship so it was more like a scholarship. The Applied Electrophysics Department was just getting started, and they needed students so they were out to recruit them.

After my first year at UCSD, I got a summer job with GD in Fort Worth, Texas where they were making F-111s. This division was called General Dynamics Fort Worth appropriately enough. Again it was a pretty boring job, but I did do a pretty interesting make work project involving a method for locating a fault. There's a term for it which escapes me. Anyway nothing probably came of my project, but it kept me occupied. However, I wasn't too happy in Fort Worth. I had wanted to stay and work in San Diego that summer. The Vietnam War was heating up, and I was becoming more politically active and aware.

The next summer I worked at the General Dynamics Electronics Division, which had a huge plant along Pacific Highway. General Dynamics paid no local property taxes on that real estate due to a little deal with the Federal Government in which GD sold or gave the plant to the Federal Government which in turn leased it back to GD. Since the Federal Government doesn't have to pay local property taxes, this is how GD got out of paying them. This cut the rug out from under the local school system which depended heavily on local property taxes. I did a muckraking article on this and other profit enhancing shenanigans GD engaged in for the San Diego Free Press.

After two summer jobs at GD I decided to part ways and ended my employment there. At that point I was heavily involved in student politics at UCSD, writing for the Free Press and protesting the Vietnem War. The extensive plant formerly owned by GD Electronics is still there. Now it's known as SPAWAR. SPAWAR stands for Space and Naval Warfare Systems Center, a not very accurate acronym, but then guys, believe it or not, get paid to sit around and come up with new acronyms periodically.

"Space and Naval Warfare Systems Center Pacific (SSC Pacific) is responsible for development of the technology to collect, transmit, process, display and, most critically, manage information essential to successful military operations. The Center develops the capabilities that allow decision-makers of the Navy, and increasingly of the joint services, to carry out their operational missions and protect their forces."

Their website offers a considerable amount of military psychobabble and bullshit intended to snow the observer, but it's obvious that SPAWAR is just a gigantic boondoggle offering middle class social welfare for those willing to get with the program and go along to get along. It's obvious that nothing of any significant value militarily or in any other way will come out of there. The significant programs will be contracted out to Jet Propulsion Lab or Lincoln Lab.

Six charged with corruption, fraud at SPAWAR

Originally published 3:55 p.m. July 7, 2009, updated 9:23 a.m., July 8, 2009

SAN DIEGO – A high-ranking manager of a San Diego-based government research organization, his wife and four other people have been charged in federal indictments with fraud and corruption related to nearly $5 million in contracts awarded since 1999.

Space and Naval Warfare Systems Command employees Gary Alexander, 49, and his wife, Kelly Alexander, 46, accepted cash bribes and other items of value from individuals seeking employment as government subcontractors, according to the 25-count indictment unsealed Tuesday.

Two others were charged with paying the bribes, which included thousands of dollars in cash along with things such as a men's Rolex watch.

This is not surprising because the business of so many adjuncts to the MIC is contracting out work. So the fact that profitable games are being played around the contracting out of that work or that defense contractors are bribing congressman like Randy "Duke" Cunningham (now serving a jail sentence) for contracts is not surprising. The fact that so many of these boondoggles are entirely legitimate is not surprising either. Not everyone is tempted to step over the line - only the overly ambitious.

So the Military-Industrial-Complex marches on with variations on the themes I observed when I was a part of it. Cost Plus contracts, layers and layers of middle managers, department heads and others lobbying Congress for contracts, subcontracting galore and proliferating work ad infinitum, the actual work being done by PhDs at some elite laboratories, the majority of workers doing no useful work but simply being contract monitors. This is all done to consume ever increasing amounts of the Federal government's money for the Military Industrial Complex which represents a giant sucking sound of taxpayer money being sucked down the tubes.

I finally became a full time activist with rather tenuous ties to, but ostensibly a member of, the student body at UCSD. Later after receiving a Masters Degree in Information and Computer Science, I would again enter the realm of the MIC but that will be the subject of another blog.

Faith in Corporate America and its doctrine of "free enterprise" have been tanking for the past year or more. Some 15 million people remain out of work, and the jobless rate, which hit 9.8% in September, is still rising.

The richest 1% of the nation is now hauling in 23% of the national income, a bigger share than the bottom half of the population, which is now mired in insecurity and even desperation.

That sense of despair comes in large part from the feeling that few, if any, powerful voices are speaking up forcefully in the name of Americans' whose factories have been shut down and whose voice in society has been shut out.

The Obama administration, unable to take bold steps for reform, instead relies ever more heavily on Wall Streeters like Treasury Secretary Timothy Geithner, Lawrence Summers and Steven Ratner to create a sense of financial stability. The New York Timesspelled out Geithner's record with unusual frankness:

An examination of Mr. Geithner's five years as president of the New York Fed, an era of unbridled and ultimately disastrous risk-taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Street's giant financial institutions.

His actions, as a regulator and later a bailout king, often aligned with the industry's interests and desires, according to interviews...

Those at the top of the economic pyramid seem to feel more confident than ever about retaining every important feature of the old order. After all, the Dow has hit 10,000 again, and Wall Streeters stand to collect record bonuses even higher than 2007.

The bankers, led of course by Goldman Sachs, intend to permit only the most token reforms on executive compensation and the deregulated policies that produced the great meltdown.

Indeed, why change anything? After all, Goldman Sachs' pool of cash for bonuses is on track to reach nearly $23 billion by the end of the year. "In 2007, Wall Street's previous record year, Goldman CEO Lloyd Blankfein took home $68 million. In 2008, 212 Goldman Sachs power suits stuffed their pockets with over $3 million each," reports Sam Pizzigatti, in his invaluable newsletter Too Much.

“How is it possible that the year after billions of taxpayer dollars helped companies like Goldman Sachs return to financial health, this company shows absolutely no restraint? Goldman Sachs is poised to become the poster child of the company that drives income disparity in the United States?" said Laura Berry, executive director of Interfaith Council on Corporate Responsibility, while introducing a new shareholder challenge against excessive executive pay at Goldman Sachs.

Nonetheless., Barney Frank—whom many of us had counted on to champion the little guy as chair of the House Banking Committee—is backing off on many key reforms in banking, disappointing groups like Americans for Financial Reform.

Frank's chief concern these days: not wishing to discourage "financial innovations," i.e. the kind of exotic, wealth-destroying instruments that drain the real productive economy and keep us vulnerable to more meltdowns.

Meanwhile, the nation's "pay czar" Kenneth Feinberg supposedly cracked down on Kenneth Lewis of Bank of America by forcing him to cough up his 2008 salary of $1.5 million, a cruel punishment so harsh that Lewis will be fored to retire with a package of a mere $69.5 million.

Federal health "reform" legislation without a strong public option that has the clout of Medicare to negotiate prices would be unthinkable if America had not evolved into what an internal Citbank memo called a "plutonomy" where the super-rich monopolize the benefits of our economy and thoroughly dominate what the elected government is permitted to discuss in the name of reform.

Nor would such pathetic gestures at health and financial reform be tolerated if Americans had a deeper sense of ther economic rights they should hold as American citizens.

Among all the surprisingly subtle touches in Michael Moore's new documentary, Capitalism: A Love Story, none impressed me more than the film's segment on Franklin Roosevelt's "Economic Bill of Rights." (University of Chicago law professor Cass Sunstein devoted an entire book to FDR's concept, but Moore's film provides a much more inspirational account.)

FDR, already in declining health, delivered a "state of the Union" speech via radio in January 1944 that is one of America's most important public addresses. He intoned that political democracy was imperiled by a lack of economic democracy and an absence of economic security:

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty...

As our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.

We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.

He went on to enumerate the rights for which he envisioned a consensus emerging in America:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

FDR held out a very different vision from our current "plutonomy," in which nearly all the economic gains, power and security are held by the few. He finished:

All of these rights spell security...

America’s own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens.

Unfortunately, FDR's Economic Bill of Rights never was "carried into practice," and is far from accepted—most notably by many top Democrats.

Given where we are and where we're headed, FDR's 1944 speech ought to be urgently required reading for President Obama—after he banishes Geithner, Summers, Ratner and the other free-marketeers to the unemployment line.

The Pentagon pays an average of $400 to put a gallon of fuel into a combat vehicle or aircraft in Afghanistan.

The statistic is likely to play into the escalating debate in Congress over the cost of a war that entered its ninth year last week.

Pentagon officials have told the House Appropriations Defense Subcommittee a gallon of fuel costs the military about $400 by the time it arrives in the remote locations in Afghanistan where U.S. troops operate.

“It is a number that we were not aware of and it is worrisome,” Rep. John Murtha (D-Pa.), the chairman of the House Appropriations Defense panel, said in an interview with The Hill. “When I heard that figure from the Defense Department, we started looking into it.”

The Pentagon comptroller’s office provided the fuel statistic to the committee staff when it was asked for a breakdown of why every 1,000 troops deployed to Afghanistan costs $1 billion. The Obama administration uses this estimate in calculating the cost of sending more troops to Afghanistan.

The Obama administration is engaged in an internal debate over its future strategy in Afghanistan. Part of this debate concerns whether to increase the number of U.S. troops in that country.

The top U.S. general in Afghanistan, Stanley McChrystal, reportedly has requested that about 40,000 additional troops be sent. Democrats in Congress are divided over whether to send more combat troops to stabilize Afghanistan in the face of waning public support for the war.

Any additional troops and operations likely will have to be paid for through a supplemental spending bill next year, something Murtha has said he already anticipates.

Afghanistan — with its lack of infrastructure, challenging geography and increased roadside bomb attacks — is a logistical nightmare for the U.S. military, according to congressional sources, and it is expensive to transport fuel and other supplies.

A landlocked country, Afghanistan has no seaports and a shortage of airports and navigable roads. The nearest port is in Karachi, Pakistan, where fuel for U.S. troops is shipped.

From there, commercial trucks transport the fuel through Pakistan and Afghanistan, sometimes changing carriers. Fuel is then transferred to storage locations in Afghanistan for movement within the country. Military transport is used to distribute fuel to forward operating bases. For many remote locations, this means fuel supplies must be provided by air.

One of the most expensive ways to supply fuel is by transporting it in bladders carried by helicopter; the amount that can be flown at one time can barely satisfy the need for fuel.

The cheapest way to transport fuel is usually by ship. Other reasonable methods to provide fuel are by rail and pipeline. The prices go up exponentially when aircraft are used, according to congressional sources.

The $400 per gallon reflects what in Pentagon parlance is known as the “fully burdened cost of fuel.”

“The fully burdened cost of fuel is a recognition that there are a lot of other factors that come into play,” said Mark Iden, the deputy director of operations at the Defense Energy Support Center (DESC), which provides fuel and energy to all U.S. military services worldwide.

The DESC provides one gallon of JP8 fuel, which is used for both aircraft and ground vehicles, at a standard price of $2.78, said Iden.

The Commandant of the Marine Corps, Gen. James Conway, told a Navy Energy Forum this week that transporting fuel miles into Afghanistan and Iraq along risky and dangerous routes can raise the cost of a $1.04 gallon up to $400, according to Aviation Week which covered the forum.

“These are fairly major problems for us,” Conway said, according to the publication.

The fully burdened cost of fuel accounts for the cost of transporting it to where it is needed, said Kevin Geiss, program director for energy security in the Office of the Assistant Secretary of the Army for Installations and Environment.

And moving fuel by convoy or even airlift is expensive, according to the Army news release from July 16, which quoted Geiss. In some places, Geiss said, analysts have estimated the fully burdened cost of fuel might even be as high as $1,000 per gallon.

Energy consumed by a combat vehicle may not even be for actual mobility of the vehicle, Geiss said, but instead to run the systems onboard the vehicle, including the communications equipment and the cooling systems to protect the electronics onboard.

Some 8o percent of U.S. military casualties in Afghanistan are due to improvised explosive devices, many of which are placed in the path of supply convoys — making it even more imperative to use aircraft for transportation.

According to a Government Accountability Office report published earlier this year, 44 trucks and 220,000 gallons of fuel were lost due to attacks or other events while delivering fuel to Bagram Air Field in Afghanistan in June 2008 alone.

High fuel demand, coupled with the volatility of fuel prices, also have significant implications for the Department of Defense’s operating costs, the GAO said. The fully burdened cost of fuel — that is, the total ownership cost of buying, moving and protecting fuel in systems during combat — has been reported to be many times higher than the price of a gallon of fuel itself, according to the report.

The Marines in Afghanistan, for example, reportedly run through some 800,000 gallons of fuel a day. That reflects the logistical challenges of running the counterinsurgency operations but also the need for fuel during the extreme weather conditions in Afghanistan — hot summers and freezing winters.

With the military boosting the number of the all-terrain-mine resistant ambush-protected vehicles (M-ATVs) in Afghanistan meant to survive roadside bombs, the fuel consumption will likely rise even higher, since those vehicles are considered gas-guzzlers.

The Pentagon comptroller’s office did not return requests for comment by press time.

"It's so good to come together," Pastor Cecil Williams declares. His is a diverse congregation - white and African-American, gay and straight, young and elderly.

For four decades Pastor Williams has been an outspoken advocate for the city's poor and marginalised. On one bright October Sunday recently, he preached a sermon on compassion and the need for social justice.

"You affirm who you are when you stand up for others in need," Williams told his flock. "And you can say, we are going to change this old world to a new world."

But it is a harsh new world in California these days. A state once synonymous with opportunity and prosperity, sunshine and surf, Hollywood and Disneyland have fallen on bitterly hard times.

'Land of opportunity'

The evidence is no further away than the church basement, where free meals are prepared for homeless and hungry people such as Robert Shirley. He's been homeless, on and off, for months, he says.

"California was the land of opportunity. You could make it out here," Shirley says. "Hey, I'm sorry, but California is not that way any more."

The number of meals served here has jumped 21 per cent since last year. Williams says the free kitchen's clientele has changed drastically.

"They were people [in food lines] who were carrying briefcases, people who were dressed in suits, people who were dressed up very nicely and had been a part of the middle class"

Robert Shirley, homeless California resident

"They were people who were carrying briefcases, people who were dressed in suits, people who were dressed up very nicely and people who had been a part of the middle class," he says.

"And we were seeing them come through the lines. And that, of course, was shocking."

California is the world's eighth-largest economy, but its unemployment rate is over 12 per cent - the highest in 70 years.

Millions of people lost their homes when the housing bubble burst. Millions more have been thrust into poverty by the recession.

In July, the state legislature haggled for weeks over how to close a $26bn budget gap. Instead of increasing taxes for corporations or the wealthy, the budget deal that emerged to be signed by Arnold Schwarzenegger, the state's Republican governor, ordered deep spending cuts, laying off tens of thousands of state workers.

Reduced funding for education, coupled with big tuition increases, sparked a student and faculty strike at California's public universities. Programmes for ex-prison inmates and parolees have been slashed.

And the social safety net of healthcare and services for the poor, children and elderly - the least powerful and least vocal members of society - has been systematically shredded.

"The people that are going to be effected first and foremost will be the poor, those who are in great need," Williams says sadly. "They are not considered to be human beings."

State 'abandoning its poorest'

In Pleasant Hill, a suburb outside San Francisco, I met a remarkable young woman named Amy Fedeli. Only 24-years old, she has deferred her dream of college and a career in nursing to support her 75-year-old grandmother, Margaret, and seven-year-old niece, Emilia.

She's keeping faith with her loved ones in a state that is systematically abandoning its poorest and least powerful people.

Schwarzenegger is fighting a legal challenge against proposed cuts in elderly care [EPA]

Margaret, who suffers from a neurological disorder and mild dementia, is too frail to be left home alone while Amy goes to her job at a medical-records company.

So she attends a state-funded adult day-care programme where she gets physical and occupational therapy, health checkups, and a chance to interact with other people and keep her mental faculties sharp.

But as part of the effort to pare down the budget deficit, California has cut many programmes for the elderly poor.

New rules would limit seniors to three days a week in adult day care. That is a big problem for the Fedeli family. Without the daily care she gets at the senior centre, Amy says, Margaret might not survive for long.

"She would probably end up in a nursing home," Amy says. "She would probably pass. She would probably die, God forbid."

To care for Margaret, Amy would have to quit her job, leaving the little family without any income. Why has she accepted so much responsibility at such a young age?

"It's family, that's all I can say," Amy says. "Your family, you stick with them - that's all."

State politics 'deadlocked'

A legal challenge has temporarily halted some of the cuts to elderly care. But Schwarzenegger is trying to overturn the court ruling and re-institute the cuts.

Donna Calame, who runs a state programme that provides in-home care for seniors, told me the attitude of Schwarzenegger and the legislature makes her livid.

"For me, it's really obscene," she said in an interview.

"We are a rich state. I think it is because of the wealth in California that, to me, makes the choices that have been made this year so morally reprehensible."

"Somewhere, somehow, the public good, as a concept of governance, has disappeared in this state"

Sherry Bebitch Jeffe, analyst, University of Southern California

Critics say California's politics are so deadlocked, its government so dysfunctional, it may become the US's first failed state.

The state legislature is hamstrung by a law requiring a two-thirds majority vote to raise taxes and pass a budget. That makes compromise practically impossible.

I asked political analyst Sherry Bebitch Jeffe of the University of Southern California what's wrong with California.

"What is the matter with California is, that we have become politically so polarised that we can't agree on something that will make this state work," Bebitch Jeffe laments.

"Somewhere, somehow, the public good, as a concept of governance, has disappeared in this state."

The failure of California's government has bred profound cynicism among its people.

Back at the soup kitchen, Robert Shirley has some blunt advice for the people in charge of the Golden State.

"If our politicians don't get their heads out of their asses, this state is going to be - let's put it this way: some of those Third World countries are going to look a lot better than California."

The opinions expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.

Cashing in the War Dividend

The Joys of Perpetual War

by Jo Comerford

So you thought the Pentagon was already big enough? Well, what do you know, especially with the price of the American military slated to grow by at least 25% over the next decade?

Forget about the butter. It's bad for you anyway. And sheer military power, as well as the money behind it, assures the country of a thick waistline without the cholesterol. So, let's sing the praises of perpetual war. We better, since right now every forecast in sight tells us that it's our future.

The tired peace dividend tug boat left the harbor two decades ago, dragging with it laughable hopes for universal health care and decent public education. Now, the mighty USS War Dividend is preparing to set sail. The economic weather reports may be lousy and the seas choppy, but one thing is guaranteed: that won't stop it.

The United States, of course, long ago captured first prize in the global arms race. It now spends as much as the next 14 countries combined, even as the spending of our rogue enemies and former enemies -- Cuba, Iran, Libya, North Korea, Sudan, and Syria -- much in the headlines for their prospective armaments, makes up a mere 1% of the world military budget. Still, when you're a military superpower focused on big-picture thinking, there's no time to dawdle on the details.

And be reasonable, who could expect the U.S. to fight two wars and maintain more than 700 bases around the world for less than the $704 billion we'll shell out to the Pentagon in 2010? But here's what few Americans grasp and you aren't going to read about in your local paper either: according to Department of Defense projections, the baseline military budget -- just the bare bones, not those billions in war-fighting extras -- is projected to increase by 2.5% each year for the next 10 years. In other words, in the next decade the basic Pentagon budget will grow by at least $133.1 billion, or 25%.

When it comes to the health of the war dividend in economically bad times, if that's not good news, what is? As anyone at the Pentagon will be quick to tell you, it's a real bargain, a steal, at least compared to the two-term presidency of George W. Bush. Then, that same baseline defense budget grew by an astonishing 38%.

If the message isn't already clear enough, let me summarize: it's time for the Departments of Housing and Urban Development, Transportation, Health and Human Services, Labor, Education, and Veterans Affairs to suck it up. After all, Americans, however unemployed, foreclosed, or unmedicated, will only be truly secure if the Pentagon is exceedingly well fed. According to the Office of Management and Budget, what that actually means is this: 55% of next year's discretionary spending -- that is, the spending negotiated by the President and Congress -- will go to the military just to keep it chugging along.

The 14 million American children in poverty, the millions of citizens who will remain without health insurance (even if some version of the Baucus plan is passed), the 7.6 million people who have lost jobs since 2007, all of them will have to take a number. The same is true of the kinds of projects needed to improve the country's disintegrating infrastructure, including the 25% of U.S. drinking water that was given a barely passing "D" by the American Society of Civil Engineers in a 2009 study.

And don't imagine that this is a terrible thing either! There's no shame in paying $400 for every gallon of gas used in Afghanistan, especially when the Marines alone are reported to consume 800,000 gallons of it each day. After all, the evidence is in: a few whiners aside, Americans want our tax dollars used this way. Otherwise we'd complain, and no one makes much of a fuss about war or the ever-rising numbers of dollars going to it anymore.

$915.1 billion in total Iraq and Afghanistan war spending to date has been a no-brainer, even if it could, theoretically, have been traded in for the annual salaries of 15 million teachers or 20 million police officers or for 171 million Pell Grants of approximately $5,350 each for use by American college and university students.

Next March, we will collectively reach a landmark in this new version of the American way of life. We will hit the $1 trillion mark in total Iraq and Afghanistan war spending with untold years of war-making to go. No problem. It's only the proposed nearly $900 billion for a decade of health care that we fear will do us in.

Nor is it the Pentagon's fault that U.S. states have laws prohibiting them from deficit spending. The 48 governors and state legislatures now struggling with budget deficits should stop complaining and simply be grateful for their ever smaller slices of the federal pie. Between 2001 and 2008, federal grant funding for state and local governments lagged behind the 28% growth of the federal budget by 14%, while military spending outpaced federal budget growth with a 41% increase. There is every reason to believe that this is a trend, not an anomaly, which means that Title 1, Head Start, Community Development Block Grants, and the Children's Health Insurance Program will just have to make do with less. In fact, if you want a true measure of what's important to our nation, think of it this way: if you add together the total 2010 budgets of all those 48 states in deficit, they won't even equal projected U.S. military spending for the same year.

Take the situation of Massachusetts, for example. Yankee spirit or not, that state will see a 17.3% decrease in federal grants in 2010 no matter how hard Governor Deval Patrick wrings his hands. True to the American way, Patrick's projected $5 billion fiscal year 2010 deficit will be his problem and his alone, as is his state's recently-announced $600 million budget shortfall for 2009. Blame it on declining tax revenue and the economic crisis, on things that are beyond his control. No matter, Patrick will have to make deep cuts to elderly mental health services and disabled home-care programs, and lose large chunks of funding for universal pre-kindergarten, teacher training, gifted and talented programs in the schools, and so much more.

Still, that Commonwealth's politicians are clearly out of step with the country. On October 9, 2009, Boston Mayor Thomas Menino joined with Congressman Barney Frank in calling on President Obama to find extra money for such programs by reducing military spending 25%. President Obama, cover your ears! Menino, who actually believes that a jump in military spending contributed to "significantly raising the federal deficit and lowering our economic security," asked the federal government to be a better partner to Boston by reinvesting in its schools, public housing, transportation, and job-training programs, especially for young people. Of course, this is delusional, as any Pentagon budgeteer could tell you. This isn't some Head Start playground, after all, it's the battlefield of American life. Tough it out, Menino.

One principle has, by now, come to dominate our American world, even if nobody seems to notice: do whatever it takes to keep federal dollars flowing for weapons systems (and the wars that go with them). And don't count on the Pentagon to lend a hand by having a bake sale any time soon; don't expect it to voluntarily cut back on major weapons systems without finding others to take their place. If, as a result, our children are less likely to earn high school and college diplomas than we were, that's what prisons and the Marines are for.

So let's break a bottle of champagne -- or, if the money comes out of a state budget, Coke -- on the bow of the USS War Dividend! And send it off on its next voyage without an iceberg in sight. Let the corks pop. Let the bubbly drown out that Harvard University report indicating that 45,000 deaths last year were due to a lack of health insurance.

Hip hip...

[Note on sources: For more information and many of the figures on defense spending in this piece, see the National Priorities Project's Security Spending Primer: Getting Smart About The Pentagon Budget, which can be found at the top of the project's website. The Primer answers the most frequently asked questions about, and supplies the most commonly requested information on, the Pentagon budget and U.S. military spending. Note also that Jo Comerford can be seen in Robert Greenwald's striking new filmRethink Afghanistan.]

Copyright 2009 Jo Comerford

Jo Comerford is the executive director of the National Priorities Project. Previously, she served as director of programs at the Food Bank of Western Massachusetts and directed the American Friends Service Committee's justice and peace-related community organizing efforts in western Massachusetts.

Don’t Bail on Wall Street Outrage

by Derrick Z. Jackson

PRESIDENT OBAMA is far too absent of outrage over Wall Street's continued abuses. As a candidate, he railed against its "greed and irresponsibility.'' He had more to say in his first month in the White House, after finding out that Wall Street firms were still paying $18.4 billion in bonuses despite bringing America to its financial knees and dropping to their own knees for an unprecedented $700 billion taxpayer bailout.

"That is the height of irresponsibility. It is shameful,'' Obama said. Calling on Wall Street to share in the recovery out of the "big hole'' of the economic crisis, Obama said, "There will be time for them to make profits, and there will be time for them to get bonuses - now is not that time.''

So now is the time? Just a year after the bailout, the Wall Street Journal last week reported that the nation's top 23 banks and investment firms plan to give out a record $140 billion in bonuses. The Dow may be back up over the 10,000 mark, but unemployment is still going up, too, to nearly 10 percent, more than double what it was at the beginning of this decade. Black unemployment is 15.4 percent. States, including Massachusetts, are still announcing massive job and funding cuts. Workers are told to be patient, that jobs might not come back in a few months or even a few years, but they will come back.

But the toga party is already back on Wall Street. All that Obama has done so far is send out his charges to bleat some mild humbugs on the talk shows. Chief of staff Rahm Emanuel said, "The American people have a right to be frustrated and angry. . . . Wall Street is back doing what Wall Street did. They have a responsibility to part of the solution.''

Adviser David Axelrod did call the bonuses "offensive.'' He said it was also offensive that ordinary Americans were not yet seeing the kind of lending that helps them. But then he qualified everything by saying the administration has "limited sway other than moral suasion.''

It is time for that moral suasion. One possible reason the administration has not been as assertive as it should be is that in conventional Washington politics, it is biting the hand that fed them. In the 2008 elections, JPMorganChase, Citigroup, and Bank of America gave the majority of their $10 million in campaign contributions to the Democrats. Another reason is that the administration still wants banks to increase lending as well as accept consumer protections.

But these reasons are not enough when Bank of America is about to pay out $30 billion in bonuses, followed by JPMorganChase at $29.5 billion, Citigroup and Goldman Sachs at $22 billion each, and Morgan Stanley at $16.4 billion.

They are behaving as if last year never happened at all, candidly crying to the Journal that if they didn't pay billions in bonuses, oh my, their employees would flee. Goldman Sachs spokesman Lucas van Praag told the Journal, "The easiest way to destroy the firm would be if we didn't pay our people. . . . Destroying a profitable enterprise would not be in anybody's interest.''

That sounds like professional spoiled brats, especially when there are still too many once-profitable mom-and-pop enterprises going down the tubes and too many nonprofit enterprises like public schools, police, fire, and public works construction being slashed to the bone. He should demand that the bonuses be slashed, say by half, with the other half going to long-established charities. Can you imagine what $70 billion would do for the United Way or the Boys and Girls Clubs?

Back in January, Obama said, "We're going to be having conversations as this process moves forward directly with these folks on Wall Street to underscore that they have to start acting in a more responsible fashion if we are to, together, get this economy rolling again.'' All that has happened thus far is that Wall Street is rolling again, a steamroller once again flattening the American people.

Weekly Audit: A Tale of Two Economies

by Zach Carter

The U.S. economy is has diverged: Wall Street is living high on the hog, while everyone else is struggling. The Dow Jones Industrial Average eclipsed 10,000 for the first time since last October this week, even as unemployment continues to spiral out of control. And while President Barack Obama has taken some very real steps to help ordinary people, his administration’s efforts to save Wall Street have far outstripped their support of workers.

Matthew Rothschild details these disparities for The Progressive. Regulatory reforms are moving through Congress at a snail’s pace and the wreckage from the mortgage bubble is increasing. Wage cuts are more widespread today than in any era since the Great Depression, even as bankers capitalize on taxpayer bailouts to score epic profits and outsized bonuses.

“One economy is for the rich and the upper middle class,” Rothschild writes. “The other economy is for everybody else.”

So how can a few big banks make so much money while the rest of the economy suffers? As Kevin Drum explains for Mother Jones, the kind of banking that helps the economy is a pretty simple business of taking deposits and making loans. But a lot of what we now call “banking” really just consists of making bets on just about anything you can dream up.

“Banks aren’t using all this cheap money to increase lending. They’re using it to fund bigger and bigger bets in the fixed-income sector — the same sector that brought us junk bonds, credit default swaps, subprime loan securitization, interest rate carries, collateralized debt obligations, and all the rest of Warren Buffett’s ‘financial weapons of mass destruction.’”

The banks, in other words, are gambling with taxpayer money. A host of big finance companies have reported earnings in the past week, and the numbers are ugly: JPMorgan Chase reaped $3.59 billion in third-quarter profits and Goldman Sachs is planning to payout $23 billion in bonuses from speculative trading, while Bank of America and Citigroup are hemorraging money on mortgages and credit cards. The Wall Street casino is alive and well, but anything that is actually tied to the real economy is a disaster.

According to a new report from the U.S. Treasury, lending among the largest recipients of the Troubled Asset Relief Program fell by 17% from July to August. Small businesses can’t cope with the cutoff in financing. A lot of businesses stay profitable over the long-term by borrowing money to meet short-term expenses. A baker can borrow money to buy flour and pay the bank back when she sells her bread. With bank lending on ice and consumers cutting back on spending, many small businesses are failing. Thousands more will be at risk in the next couple of years while unemployment remains elevated.

Writing for Salon, former Clinton Secretary of Labor Robert Reich notes that these economic struggles are not reflected in major stock indices. Stock are soaring as big corporations who don’t need bank loans score short-term profits from cost-cutting, i.e., mass layoffs. Obviously, this strategy can’t work for very long. When millions of Americans are out of work, they can’t afford to buy the things companies make.

There’s an important lesson in our current economic state-of-affairs, as Katrina vanden Heuvel emphasizes for The Nation. The bailout has not done what Henry Paulson told us it would do. To be sure, it saved the banks– even the strongest banks would have failed last fall without extraordinary government support. But it has not increased lending and kept the economy from disaster. The Obama administration, which has extended the Bush administration’s support for bank balance sheets and bonus checks, is facing a political nightmare if it doesn’t show produce some stronger economic results for ordinary citizens.

“Heading into 2010, the Obama administration must put itself back on the side of working people,” vanden Heuvel writes.

The administration must address two critical problems in order to restore the nation’s economic credibility. Putting the unemployed back to work is at the top of the list. Anything that saves jobs will help, including aid to states to keep teachers and cops on government payrolls and tax credits for companies that hire new full-time workers.

Something must also be done about the foreclosure epidemic. Nothing underscores our economic disparity like continuing housing mess, which has been in full-blown crisis mode since 2006. Despite a multi-trillion-dollar bank bailout, foreclosures are surging to all-time highs. Writing for The American Prospect, Tim Fernholz details the prolonged problems with the Obama administration’s current foreclosure relief program.

While millions of troubled borrowers are eligible for the plan, which reduces monthly mortgage payments to affordable levels, foreclosures are still outpacing loan relief efforts by more than two-to-one.

Banks are dragging their feet and the administration has imposed no penalties on lenders who don’t live up to the program’s standards. Instead, the Treasury Department is offering banks cash incentives to keep people in their homes. Bank of America, which has received $45 billion in direct government bailout funds, plus hundreds of billions in government guarantees and other perks, has modified merely 11% of the mortgages it controls that are eligible for the plan.

Fernholz offers several potential improvements to Obama’s foreclosure relief plan, including more aggressive government policing of the current plan and allowing foreclosed homeowners to continue to live in their homes as renters. With up to 12 million foreclosures projected by the end of 2012, just about anything the administration does will help.

The economy is a measure of social well-being, not a stock market index or a corporate earnings statement. Policymakers need to prove they can respond to the very real needs of all their citizens, not just those with financial clout.

October 18, 2009

US Healthcare History: Our Very Own Killing Fields

by Donna Smith

Jenny Fritts was 24 years old. Jenny lived with her husband Sean for the past five years, and together they had a little girl named Kylee, 2. Jenny was seven-and-a-half months pregnant with her second child - a beautiful, baby girl.

Jenny is dead. Jenny's unborn baby is dead. They died because they were turned away for appropriate care at a for-profit hospital because they did not have health insurance. Sean rushed Jenny back to another hospital when her symptoms became even more severe, and he lied about having insurance to get her in the door. She was placed on a respirator in intensive care, but she didn't make it. She died. And so did her baby.

They become two more of the more than 45,000 Americans who die preventable deaths due to our broken healthcare system every year. Two more. Mother and child.

And the tragedy doesn't end there. Sean has been very depressed since he lost Jenny and their baby. The rest of his family and friends are worried about him. But he cannot get treatment either. He doesn't have insurance. (You can watch their story here: http://www.youtube.com/watch?v=td802aj-7Sc) Imagine how you might feel. Imagine.

These are our killing fields. In America. In October 2009. In Barack Obama's America. That land full of hope and promise for those who can afford that hope and promise. Yet few in our government offices react as one might think you would when hearing of Jenny and the baby and Sean and Kylee.

I read these stories every day on the guaranteedhealthcare.org website. I read them and clean up a spelling glitch or two and then post them for the world to see. The website belongs to the nurses of the California Nurses Association and the National Nurses Organizing Committee. Patients send their stories to the nurses in cascading waves of anger and frustration and desperation. They want someone to listen and to give a damn. And they want someone to help.

But there are so many. The nurses advocate for their own patients whenever they can. And when it's possible, nurses take to the streets and to the phone to try to protest. But the numbers swell every day.

Many are like Jenny and Sean and have no insurance at all or have lost their insurance when they lost jobs or because an employer cannot afford to offer it.

Some are insured and fighting insurance companies for care that their doctors have ordered.

Rich Zandlo, 38, suffers from Cystic Fibrosis and is currently surviving off just 19 percent of his lungs. Rich, who lives in Phoenix, needs a lung transplant at UCLA, but his insurer will not cover the transplant if it is done out of state.

His family is looking for help raising money to get him temporary housing and care in California so he can be available to be on the operating table when the call comes. Find out more, and what you can do to help, at their website, www.helprichzandlo.com.

Amanda (Tannery) Field, 30, has thrombocytosis and doctors are also working her up for Budd Chiari syndrome which is preventing the liver from draining properly. Simply put, her liver is dying. Amanda and her husband both work full time, and she has a 13 year old son to support. Due to the illness, she has been unable to work recently, due to the hospital stays. Aetna, her insurer, has denied help due to a lapse in coverage while she was unemployed.

Amanda's family also has a website, http://www.giveforward.org/amandafield/ where they are trying to raise the quarter million dollars necessary for a liver transplant. They have raised only 7 percent of the funds needed to be evaluated for a transplant. Doctors are currently working on a variety of interim measures to keep her alive.

So, what is our Congress waiting for? And our President? Have they so detached themselves from Sean's reality, from Rich's struggle for air and from Amanda's failing health that they think this debate is about excise taxes and re-election prospects?

This is no political contest. This is very real life and death. Mothers and babies. Young and old. The profit-takers know no boundaries for their greed, and our killing fields are filling with the innocents.

We apparently do not understand that this is no different than an external enemy attacking our citizens and killing 120 of them every single day. What would we be doing? Would we repel that aggressor? Would we protect civilian lives? I don't know that answer to that as we apparently think it acceptable to allow Jenny and her baby to die. And they were just two that day - 118 others died too just on that day alone.

The media should cover Jenny's death and her baby's death with as much intensity as any boy in a balloon drifting over the Rockies. When we are forced to confront what we are allowing to happen in homes and clinics and hospitals all across this land, we will perhaps find it less easy to dismiss as anomaly.

Healthcare is a basic human right. Whatever stops the human rights transgressions against our citizens - our Jenny's and our babies -- that allow this should be halted immediately and by force, if necessary, and then fixed properly so that all citizens of these great United States have equal protection under the law of their human right to healthcare. Immediately extending care through a Medicare for All like effort would be a less drastic but equally effective fix. A non-profit, single standard of high quality healthcare for all. Jenny would be alive today and so would her baby daughter.

Our government should grant, provide and protect the right to healthcare as if it meant the future of our nation or its failure. Because that is exactly what it does mean.

LatAm Leftists Tackle Dollar with New Currency

COCHABAMBA, Bolivia - Leftist Latin American leaders agreed here on the creation of a regional currency, the Sucre, aimed at scaling back the use of the US dollar.

Official picture at the Alba summit in Cochabamba October 16, 2009.

Nine countries of ALBA, a leftist bloc conceived by Venezuelan President Hugo Chavez, met in Bolivia where they vowed to press ahead with a new currency for intra-regional trade to replace the US dollar.

"The document is approved," said Bolivia's President Evo Morales, who is hosting the summit.

The new currency, dubbed the Sucre, would be rolled out beginning in 2010 in a non-paper form.

That move echoes the European Union's introduction of the euro precursor, the ECU, an account unit designed to tie down stable exchange rates between member states before the national currencies were scraped.

The currency, which was backed in April this year, is named after Jose Antonio de Sucre, who fought for independence from Spain alongside Venezuelan hero Simon Bolivar in the early 19th century.

The bloc also called for the replacement of the World Bank's International Centre for Settlement of Investment Disputes, which arbitrates international contract disputes and has probed a slew of disputes involving ALBA members and western energy firms.

Most ALBA members have already withdrawn from the organization, with Ecuador announcing last July that it would pull out of the group.

On Friday Bolivian media reported the country intents to nationalize a electricity distribution firm owned by Spain's Red de Electrica de Espana.

It is just the latest in a series of nationalizations in Venezuela, Ecuador and Bolivia.

The Dutch social assistance system guarantees a minimum income for people who are not able to support themselves – offering sufficient financial resources (limited in amount and managed in duration)to achieve a “minimum acceptable”lifestyle.

The support takes the form of income support, activation, and specific basic facilities for most people against poverty and exclusion.

The SVB (central Social Security Institution, called the Social Insurance Bank) administers a social assistance program as follows:

1) Poverty

2) Social Assistance

3) Rights and Obligations

4) Decentralized Administration

5) Making Work Rewarding

6) Poverty Trap

7) Productivity Gap

Poverty

Poverty is seen as existing when people are afflicted by several problems simultaneously, including:

-poor employment

-inability to make ends meet

-reduced ability to do things independently

-poor state of health

Social Assistance

Local Authorities play a very important role in the social assistance, activation , and reintegration measures, since they are responsible for administering social assistance. The Dutch social assistance system is based on the principle that citizens are capable of supporting themselves independently(the ‘welfare-to-work’ goal). Those who are unable to do so are given income and support in finding work for as long as strictly necessary. In this regard, the Reformed Social Assistance Act puts great emphasis on self-activation with broad freedom and responsibility ofthe local authorities.

In the US welfare reform emphasizing welfare-to-work was undertaken during the Clinton administration under a Republican controlled Congress.

Rights and Obligations

Social assistance in the Netherlands takes the form ofa cash benefit at a subsistence level for those who cannot support themselves, and is paid to all eligible persons above 18 years of age. A precondition for receiving assistance benefits is that people must actively look for work and accept any reasonable work offer. In the US there are similar welfare-to-work provisions, but most recipients are single mothers with children. Adults without dependent children rarely receive welfare.

Benefits

Single people receive 50% of the minimum wage, single parents receive 70%, and a married couple 100%. Additional allowances are limited to 20% ofthe minimum wage for a single person and a single parent. Local authorities may deviate from general standards on basis of individual assessments. The benefit for younger people can be reduced, for example, if a local authority sees that the full benefit makes employment unattractive to the recipient.

In the US welfare is administrated by the states. Some states are more generous than others. In California, for example, recipients get a monthly cash allowance deposited directly to a debit card, plus an allowance for food stamps plus free medical care for themselves and their children. Under California's CalWorks program, which is the welfare to work program, recipients must be looking for work or enrolled in an acceptable educational program leading to work. In return they get free child care at a provider of their choice, a generous gas allowance so they can get around to submit job applications or attend school or college, an allowance for books if they are attending school and a clothes allowance so they can make themselves presentable to a prospective employer.

Decentralized Administration

Local authorities receive two budgets:one budget forbenefit payments and one for local active labor market measures, referred to as the reintegration budget.The local authority may keep any budget surplus, but it must also finance any deficit out of its own resources. This is to stimulate efficiency. Size of the reintegration budget, for example,depends on the economic cycle. Currently, local authorities are required to spend most of the budget in the private market (to reintegration service providers).This is to ensure the best possible price to quality ratio. The discretionary budget for local authorities enables the latter to customize their approach for limiting inflow into the social security system and to encourage people to get off benefits (again, the ‘welfare-to-work’ goal).

In the US there is no such thing as a reintegration budget, that is money to be paid to employers who hire social welfare recipients.

Making Work Rewarding

The strict focus here is to reduce the Poverty Trap Effect and to tackle the Productivity Gap, i.e., to make it attractive for employers to hire the less educated.

Poverty Trap

This exists when it is not financially worthwhile for the unemployedreceiving a benefit to do paid work. This abuse is strictly controlled. For example, any existence of local various income-dependent support themes on top of the central government basic benefit will result in the loss of the latter … thus reducing income and abuse of system. In the US as well there is an emphasis on getting people off welfare. There is a 5 year maximum length of time a person can receive welfare.

Productivity Gap

A productivity gap exists when it is not financially rewarding for employers to take on unskilled workers at the mimimum wage because of their low level of productivity.To remove this threshold,local authorities can provide wage subsidies to employers out of their discretionary reintegration budget.

Notes:

This may all sound very Socialistic but on the contrary has played a key role in the historically relatively low unemployment rates in the Netherlands in 3-4% range … excepting now during the current recession where the current rate is moving towards the 5-6% range. ‘Welfare-to-work’ is working!

Anotherpositive factoristhat theNetherlands has a relatively low National Debt per capita of about $19,000 vs. $37,000per capita in the US based on a current total National Debt of $11.0 trillion.They achieve this by tough budget balancing discipline.

Another important fact I´ve observed over 30 years in Holland is how brutally realistic the Dutch government and general population can be whenever social safety net programs need adjustments, reductions, and /or refinements to meet new economic conditions and/or inequities. The Dutch are an extremely prudent, hard-working people who have a deep dislike for all forms of debt, including credit cards. The average Dutch person has but 2 credit cards and the approval amounts are strictly controlled by law based on total debt obligations to income.

In contrast, in the US credit card limits and interest rates and various other charges are totally up to the credit card company which can raise or lower rates and other charges at whim. Currently, the US banking model focuses on making money by means of overdraft and over limit fees as well as various assorted other fees rather than from just interest. Even interest is reaching usurious proportions. In contrast Dutch credit card companies are strictly regulated.

October 17, 2009

Republicans don't mind expanding government if it means shifting the burden from private corporations to taxpayers. In other words smaller government is good if it means less regulation and higher profits for corporations. But if they can get government to pay for things private corporations should be paying for, then it's OK to shift the burden from the corporations to the government - in other words, to expand government - especially if it means increasing corporate profits. Again it's socialism for corporations, capitalism for the American people. Corporations increase their profits by getting taxpayers to pay for their externalities and getting taxes lowered for themselves. An army of lobbyists patrol Capitol Hill to make sure this dynamic ensues. Increasing the size of government is good if it means taxpayers pay for cleaning up corporate polluters; increasing the size of government is bad if it means that the American middle class gets a government program which helps them.

Such an example is the Superfund, originally funded by private corporations, whose purpose is to clean up pollutants put into the environment by private corporations. But according to corporations, the taxpayers, not the polluters, should pick up the tab for cleaning up the environment. So when it comes to helping the taxpayers themselves, that is not acceptable because that would be socialism. When it comes to helping the corporations, taxpayer support is necessary and desirable. This is socialism for the rich, capitalism for the poor. Another example is the trillions given to the banks in the recent bailout while middle class Americans have gotten scant help with foreclosures or jobs.

A 2007 Center for Public Integrity investigation found that the Environmental Protection Agency’s (EPA) Superfund program had lost critical momentum and massive amounts of funding since the turn of the century, bringing further risk to the quarter of the nation’s population living within three miles of a hazardous waste site. The Center found the start rate for site cleanups from 2001 to 2006 had fallen by two-thirds from the previous six-year period, and while EPA completed construction work at an average of 79 sites per year from 1995 through 2000, that rate dropped to an average of 42 per year from 2001 to 2006. Officials argued this was due to the increased complexity of newer sites after previous cleanups picked the “low-hanging fruit,” but that failed to explain the decline in money retrieved from industry to reimburse EPA for cleanups — from more than $300 million in 1999 to just about $60 million in 2006. When Congress created the Superfund program in 1980, lawmakers established a trust fund supported by a tax on petroleum products and chemicals, and enabled EPA to push responsible parties to reimburse the agency after cleanups. The Superfund tax comprised more than two-thirds of that trust fund until 1995, when Congress allowed the tax to expire. After that, the bulk of trust fund money came from Congressional appropriations, which have been declining when adjusted for inflation. As a result, the trust fund balance declined from $4.7 billion at the start of fiscal year 1997 to $173 million at the start of fiscal year 2007. Experts said the erosion of the trust fund meant the agency no longer had the money to clean up sites first and stick industry with the bill afterward. Also, the Center reported that a policy change in 2000 led to a rise in what are called site-specific accounts, which collect millions of dollars from polluters for exclusive rather than general fund use. That move, combined with bankruptcies and a dwindling trust fund, left hundreds of so-called “orphan” sites without adequate funding to clean up the mess. Some lawmakers who oppose more funding argued that soaring administrative costs were to blame for Superfund’s woes, but a 2008 Government Accountability Office (GAO) report challenged those claims, and found that total Superfund expenditures fell 29 percent since 1999. The funding fell despite the fact that 114 toxic waste sites found within 10 miles of 25 million Americans were determined by EPA to be “not under control” in 2007 — with dangerous and occasionally carcinogenic substances threatening the public by poisoning the soil, water, or air. The EPA press office did not respond to a request for comment, but the head of its Superfund program told the Senate Environment and Public Works Committee in August 2007 that “EPA funded all new cleanup construction projects that were ready for construction funding” in 2007, after subjecting them to a “rigorous prioritization project.”

Follow-up: Efforts to reintroduce the Superfund tax have failed in recent sessions of Congress, and Senate Environment and Public Works Chair Barbara Boxer, Democrat of California, admitted in 2008 that she did not then have the votes for such a measure. House Democrats introduced a bill in 2007 and Senate Democrats introduced a Polluter Pays Act in 2008, but neither attempt left committee. GAO’s presidential transition report revisited the Superfund problem and offered a number of recommendations for the next administration; most prominently, the report recommended that EPA push harder to assure that firms handling hazardous substances demonstrate their ability to pay for possible environmental cleanups. In November, the EPA announced that in FY 2008 it completed construction at 30 sites and recovered $232 million for past work. The agency cited additional accomplishments, such as securing $1.9 billion in private party commitments, but said it was not able to fund all new projects ready for construction.

K Street lobbyists haven’t squealed so loudly about proposed changes to the corporate tax code since they lost their three martini lunches. The uproar has drawn attention away from the fact that U.S. multinational corporations enjoy an effective tax rate of just 2.4 percent on billions of dollars in foreign active earnings.

In early May, the Obama administration announced plans to eliminate the advantages that multinational corporations have over domestic corporations when it comes to the tax treatment of reinvested profits. The reforms were part of a larger tax reform package that includes a pledge to step up the government’s enforcement efforts against wealthy individuals and corporations that stash their money in secret offshore tax haven accounts.

Candidate Barack Obama consistently promised to protect U.S. jobs by cracking down on corporate tax havens. At his May press conference he described the current system as “a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.”

The U.S. Treasury’s May 4 release details how it would “reform the [international corporate tax] deferral system,” a long-standing system of deductions and loopholes that allows U.S.-based multinationals to delay tax payments on overseas income until the earnings are repatriated.

Many corporate lobbyists expected Obama would repeal the entire deferral system altogether. That fear whipped up enough hysteria to motivate more than 200 large companies—including IBM, Coca-Cola, Caterpillar, Proctor & Gamble, Cisco, GE, DuPont and Eli Lilly—to send congressional leaders a letter objecting to Obama’s proposal weeks before it was even released.

Rather than eliminate the deferral system, however, the administration presented an array of specific measures designed to address some of the more routine (and costly) ways that companies legally shift overseas income to avoid U.S. taxes. In addition, Obama added a proactive concession designed to neutralize his critics: A permanent extension of certain domestic research and development (R&D) tax credits that would facilitate tax planning and stimulate innovation (especially in green technologies), while creating more jobs at home. Overall, the deferral reforms are estimated to recover $210 billion in corporate income taxes, three times the amount needed to offset the R&D credit.

K Street Whining and Designing

Despite the fact that Obama’s plan emphasizes saving U.S.-based jobs, and appeals to populist anger at corporate tax dodgers, it didn’t get much bounce.

Some of the air was taken out by the efforts of former congressman and corporate lobbyist Dick Armey’s FreedomWorks to distract the media’s attention with its pseudo-populist “taxed enough already” (TEA) protests. Meanwhile, the corporate lobbyists’ preemptive objections tamped down support from tax policy leaders on the Hill, leaving the administration open to attack.

Kenneth J. Kies, managing director of the Federal Policy Group, a lead corporate tax lobbying firm, promised that the fight over corporate tax policies would be the “largest fight the U.S. multinational community has this year and probably into the next. … This is bigger than card check [the bill that would make it easier for workers to organize unions]; this is bigger than cap-and-trade [i.e., global warming legislation] and people don’t realize it,” Kies warned. “Just imagine a world 10 years from now where there are no U.S. multinationals because they’ve all been bought by foreign competitors.”

Much is at stake for multinationals that use deferrals and other loopholes to significantly reduce their taxes. For example, the Wall Street Journal reported that 10 of the largest U.S. multinationals cut their taxes in 2008 by $20 billion by reinvesting $58 billion overseas. Specific companies that would be impacted by the change include:

• General Electric, which reportedly lowered its 2008 U.S. tax rate by 27 percent through deferrals and favorable treatment of exports;

“We know we’re going to take on some tough interests,” Obama’s press secretary Robert Gibbs said, “but the president believes this is a fight we should have, and one that we can win.” After all, he continued, “fairness is not something that will put them at a competitive disadvantage.”

Congressional Dickering

The grousing by corporate lobbyists may have been over the top, but it was not unexpected. Yet the weak support the administration received from many of its most important allies on the Hill pointed to its own failure to anticipate the furor.

In addition to closing the offshore corporate tax loopholes, the Obama proposal includes plans to:

• Limit the ability of U.S. multinationals to shift income abroad by relocating intangible property;

• Align U.S. corporate methods of accounting for inventories with International Financial Reporting Standards (IFRS), which analysts suggest will help broaden the corporate tax base;

• Target oil and gas preferences, including deductions for ordinary drilling costs, recently enacted oil and gas manufacturing deductions, and tax breaks for companies drilling in the Gulf of Mexico;

• Reinstate taxes paid by polluters for the Superfund: the EPA-managed hazardous waste site cleanup program;

• Codify the “economic substance doctrine” that courts have developed to address tax avoidance transactions designed to satisfy tax codes while contradicting their spirit;

• Increase the IRS budget, adding 800 new enforcement personnel.

Senator Max Baucus (D-MT), the powerful head of the Senate Finance Committee (which sets tax policy for the Senate), suggested that “further study is needed to assess the impact of this plan on U.S. businesses,” while Iowa Senator Chuck Grassley, the committee’s ranking Republican, pledged to support any effort to crack down on tax abuses. “But if [Obama is] using tax shelters as a stalking horse to raise taxes on corporations at the cost of U.S. jobs, he’ll lose me.”

Although Representative Charles Rangel (D-NY), chair of the House Ways and Means Committee (responsible for shaping House tax legislation), welcomed Obama’s plan—not surprising since many of the plan’s provisions were modeled after Rangel’s 2007 tax reform bill—he also suggested a possible compromise: In exchange for closing various loopholes, the Democrats might agree to lower overall corporate tax rates. Even Representative Richard Neal (D-MA), a well known progressive member of Ways and Means, gave the administration’s proposal a cool reception: “We have to keep American companies competitive, and ‘deferral’ is not [tax] avoidance.”

If groups across the ideological spectrum agree on one thing, it is that the Obama plan omitted a key reform: simplified tax codes. Although his press strategy was designed to appeal to popular outrage over corporate irresponsibility and offshore tax haven abuses, the public is unlikely to rally round a list of fairly arcane and technical reforms. By failing to stoke popular support with a clear plan, Obama has for now effectively left Congress little choice but to dicker over the details.

Obama has “bought into the Washington idea of mucking up the tax code with gimmicks” designed to satisfy one or another constituency wrote ace tax reporter David Cay Johnston in Tax Notes.

Framing the Corporate Tax Debate

In 2008 some 15,000 registered lobbyists spent more than $3.25 billion influencing the U.S. Congress. Corporations were represented by many of most wealthy and powerful among them.

The sheer power of the multinational corporate lobbyist is one reason why the corporate tax debate has been distorted for decades. For instance, the standard gripe among corporate lobbyists and their allies—that U.S. corporations pay the highest taxes in the developed world—is a canard that regularly goes by unchallenged in congressional committee rooms and the many quasi-academic roundtables where corporate tax policies are discussed.

In fact, while the statutory corporate tax rate is 35 percent, most corporations are effectively taxed at much lower rates because of the many loopholes and exemptions their lobbyists have carved into the tax code. Corporate lawyers, accountants, bankers and consultants have created an entire financial engineering and tax planning industry around specific provisions of the corporate tax code, such as transfer pricing.

The result is that, while the statutory rate may be 35 percent, in 2004 (the most recent year for which data was available) large corporations paid an effective rate of only 25.2 percent on domestic income, according to the General Accounting Office (GAO). Moreover, most large multinationals pay far less. In January, the GAO reported that U.S. multinationals paid just $16 billion in U.S. taxes on $700 billion of foreign active earnings in 2004—an effective U.S. tax rate of just 2.4 percent.

The question of whether corporations are paying their fair share cannot be answered simply by examining statutory or effective rates of taxation. Any calculation must also consider the other side of the ledger: the various benefits, contracts, foreign assistance, loans and other forms of corporate welfare that corporations receive from governments—that is, taxpayers—not to mention extraordinary disbursements such as the recent banking, auto industry and other corporate bail-outs. (Neither the Bush administration nor the Obama administration required public disclosure of the companies’ books – including their offshore subsidiaries—as a condition of the bail-out.)

In fact, as measured by the OECD, the United States collects less in corporate taxes as a percentage of GDP than most other industrialized countries, despite claims to the contrary. In 2007 (the most recent year for which the Congressional Budget Office has data), corporate income taxes totaled $370 billion—or 2.7 percent of GDP. The Congressional Budget Office projects that, “as a result of a projected decline in taxable profits as a share of the economy, corporate receipts relative to GDP [will] weaken steadily … reaching 1.7 percent of the economy in 2017 and 2018.”

One of the key ways multinationals achieve this low tax rate is by operating many “brass plate” subsidiaries (i.e., paper-only companies with no real physical operations) in one of dozens of offshore tax haven and bank secrecy jurisdictions. The GAO reported in January that 42 of the 100 largest U.S. corporations structure their operations to make use of subsidiaries located in at least ten different tax havens. Certain locations are especially popular, including the Cayman Islands, where the GAO discovered 18,000 corporate subsidiaries at one address.

There are clear links between the large numbers of tax haven subsidiaries and the decline in corporate taxes, says Martin Sullivan, a tax economist and author of “Multinational Corporations, Individual Tax Evasion & Offshore Tax Havens” (2008). Multinationals have lowered their foreign taxes further than other large companies by shifting foreign source income from places where they have real investments to low-tax jurisdictions. “The lion’s share of income shifting is tax-motivated,” says Sullivan, who adds that multinationals’ increased use of offshore tax havens threatens to push the entire U.S. corporate tax system toward “breakdown.”

Without a major course correction and bold new initiatives, Sullivan and others say, it may not be long before corporations effectively pay no taxes at all. That outcome would be consistent with the accelerated rates of globalization and concurrent declines in the rate of corporate taxation. According to the Center for Budget and Policy Priorities, the 25 percent effective rate of corporate taxation in 2004 is down significantly from the 33 percent average rate that corporations paid in the 1970s, the 38 percent they paid in the 1960s, and the 49 percent they paid in the 1950s. Real Change, Not Chump Change

“It will take time," Obama told a May press conference, “to undo the damage done by decades of corporate tax avoidance and a system designed to give multinationals an advantage over domestic industries.” When he introduced his deferral tax reform proposals at the May 4 press conference, Obama described them as a “down payment” on a broader reform agenda that will be taken up after his other priorities, especially health care and energy/climate change.

Nevertheless, although Obama has directed his tax policy advisory group (chaired by ex-Federal Reserve Chairman Paul Volcker) to consider any approaches to tax policy—except directly raising taxes on families making under $250,000 a year—there is little talk of reversing the decades-long decline in corporate taxes. Nor are there indications that the administration will go farther than a transaction-by-transaction approach to corporate taxation.

Some interesting proposals for reforming the tax code have recently come from some unlikely places, including Mark W. Everson, one of George W. Bush’s IRS commissioners (2003 to 2007). In a Washington Post oped in October, he suggested that, rather than embarking on a prolonged battle over arcane regulatory schemes that the public cannot understand, the Obama administration should be pushing for easy-to-understand measures that stand on clear principle, such as a requirement that corporate tax returns be made available to the public.

“Making corporate tax returns public would signal that we are serious about reform and would help rebuild worldwide confidence in American businesses and financial institutions,” Everson wrote. “At a minimum, Congress should not allow businesses to participate in taxpayer-funded bailouts unless we taxpayers can assess who we’re signing up with. After all, Americans routinely provide copies of their federal tax returns to financial institutions before they give us money. Shouldn’t entities looking for taxpayers’ help do the same?”

Another proposal comes from a senior adviser to the Tax Justice Network, a global coalition of NGOs and tax policy experts that focuses on an international approach to offshore tax havens. Richard Murphy, external research fellow at the Tax Research Institute at the University of Nottingham, suggests that the time has come to replace the current approach to multinational corporate taxation with a consolidated international approach. That approach would involve an agreed-upon formula for apportioning the commercial activities to be taxed among different sovereign jurisdictions, much like the territorial system used among the different U.S. states with respect to corporate income taxes.

Although governments are not likely to adopt this idea soon, the increased attention to the question of offshore tax havens at the G-20 and among OECD countries in general suggests that with strong support from NGOs and other members of civil society, a global treaty on consolidated corporate taxation may eventually be possible.

Until bolder measures are introduced and debated, however, what “we can” do at home besides push Congress to close the many tax loopholes designed to exclusively benefit multinational corporations is unclear. In response to questions about the administration’s tax reform plan, Gibbs suggested that Obama will be “happy to have a long discussion about the fairness of tax havens and tax loopholes that let companies avoid paying their taxes.”

Given the current perilous state of the economy and the ongoing exodus of U.S. jobs and tax dollars, the administration will have to do a lot more than that.

Corporations Badmouth Public Water

by Patti Lynn

Things aren't looking pretty for drinking water these days. Recent articles from TheNew York Times and the Associated Press have exposed unchecked pollution, grave gaps in oversight, decaying infrastructure, and concerns about emerging contaminants.

Yet one voice sees the decay of our water infrastructure through a rose-colored glass. "We're bullish on water in the next 10 years," said Nestlé Waters North America CEO Kim Jeffery, on a recent call for analysts. How exactly can he say this, given recent reports?

The Clean Water Act was passed in the 1970s in response to widespread public concern about high levels of water pollution. Images of the Cuyahoga River in Ohio burning or the dredging of Boston Harbor still linger as a reminder of how bad things had become. There has been much progress in the 40 years since, but there are still problems and a long way to go.

At the root of these problems lies the question, "for whom?" For whom are our country's waters intended first and foremost? Surely our founding fathers' design was not to have a set of private polluters and users control it as they please.

Behind many of the problems facing our water resources and systems lies corporate control of water. Big corporations often have priority access to water, which they then overuse, abuse or appropriate to benefit their bottom line without regard for the costs to the public. Sometimes the impact is direct-Massey dumping coal slurry into streams in West Virginia, or General Electric's legacy of PCB contamination in the Hudson River. In other cases, it is indirect--pesticides and fertilizers may be applied by farmers, but the agribusiness and chemical corporations that produce them profit handsomely from encouraging their overuse, while the impacts flow downstream.

When this is what the upstream impact of corporate control looks like, why would we look to yet another private corporation to make things right?

Nestlé's Jeffery said that, "we believe tap infrastructure in the U.S. will continue to decline. People will turn to filtration and bottled water for pure water needs." The bottled water industry isn't just seizing an opportunity- it is banking on the decline of our water infrastructure as key to their successful business model. Nestlé is actually helping to further this decline. Jeffery boasts that, "our company is the only one out there driving the consumption of bottled water in America and the need to consume bottled water in America."

Well, how does one do that, if not by disparaging the alternative-the tap? And what public, disheartened by accusations against the tap, would advocate for renewed investment in public water? (Ironically, Nestlé's Pure Life brand is bottled tap water and bottled water in general is less regulated than the tap.)

Nevertheless, Nestlé might argue, "isn't a business model based on bypassing or cleaning up other corporation's messes an illustration of the ‘magic' of market forces?" The reality is this ‘magic' means those who can pay, will, and those who cannot, will go thirsty.

As pollution increases and clean water becomes scarce, the expensive treatments required will make providing it more expensive. As rates increase, wealthy users of water--well-to-do gated communities, industrial users or big agribusiness firms--will pay what they need to pay. For the rest, there will either be derelict tap water or bottled water at prices much higher than what most of us currently pay.

Relying on corporations to provide solutions to our drinking water challenges doesn't solve the problem because it relies on the same principle--corporate control--that created many of the problems in the first place. There are other ways. Federal spending on our water systems is at historic lows. We can invest the money needed to rehabilitate them; an investment which would help pay for itself and then some by creating local jobs and promoting further economic development.

We must reaffirm our nation's commitment to first provide clean, affordable drinking water for all, and ensure that our water systems and resources are democratically controlled for the public good. Because as Nestlé's Jeffery aptly points out, "the only question [now] is who gets what share of water." It's our choice.

Karzai’s Afghanistan is a disaster. The average Afghan has received zero assistance from the U.S.-led coalition, has seen zero improvement in his or her life, and has seen no reconstruction whatsoever. Most Afghans never even see American aid workers, who never leave their compounds in Kabul. Thirteen billion dollars have been allocated for aid to Afghanistan — but there is no evidence that a single cent has ever been spent. Anthony Cordesman of the Center for Strategic and International Studies says the overall effort in Afghanistan “has been a nightmare; vast amounts have been wasted.”

NEW DELHI; India is involved in the reconstruction of war-torn Afghanistan in a major way and has pledged millions of dollars in aid, for a slew of projects starting from building roads to schools, transmission lines, hospitals, digging tube wells as well as building a swanky new Parliament building, the symbol of democracy in Kabul.

But Indian aid goes beyond this to train and prepare Afghan officials to run the administration. Many are being trained here through the International Technical and Economic Co-operation programme run by the government of India.

India had always been involved in training Afghan personnel in fact right through the days of King Zahir Shah and then through the Najibullah era to the present time.The only interruption was during the period of Taliban control when India was left out in the cold and like several other countries in the world had no diplomatic ties with Kabul.

But while officials insist that India had always been a friend of the Afghan people, the fact remains that once the Taliban regime was thrown out, New Delhi was eager to make massive inroads into the country for strategic reasons. Afghanistan is the backyard of Pakistan and getting access here is important for India.

India is also aware that it needs to have lines open to all ethnic groups in Afghanistan and has taken care to make its presence people-friendly. ``There is a marked difference between Indian aid and that of major western powers involved in the international reconstruction effort,'' says a former Indian ambassador to Kabul, who did not wish to be identified.

He points to two major differences between India and the western democracies, including the US. ``For one we don't dictate terms. We ask the government of Hamid Karzai to tell us what they want. Unlike many other countries we don't talk down to the government and push projects that individual countries think is good for Afghanistan,'' the former ambassador explained.

Whether it is 400 Tata trucks or wells in western Afghanistan or wheat which the government wanted urgently at one point, India is there to provide for what the Afghans think is necessary.

``Unlike many other nations who pledge millions of dollars and take away sometimes as much as fifty per cent of the funds in administrative cost for personnel or NGO's from the donor country, India's cost for running projects is much lower, as salaries to staff is not the same as that paid to Western workers. The Afghans realise that what India gives as aid goes mostly to the local population,'' the Indian official explained.

One of India's major projects in Afghanistan is building the $180 million strategic Zaranj-Delaram road which would open up an alternate route for the landlocked-Afghanistan to an Iranian port and reduce its dependence on Pakistan.

Last week two Indians were killed in the road construction project in the Nimroz province. The road from Iran has been vehemently opposed by the Taliban. New Delhi had to deploy the Indo-Tibetan Border Police to guard Indian workers in the road project, together with Afghan security.

India currently has pledged an assistance of $750 to $800 million for various projects, including the construction of an electricity transmission line from Pul-e-Kumri to Kabul, and the Salma Dam power project in Herat city. New Delhi is also setting up a national television network. Apart from these major works India is involved in rebuilding schools, hospitals and clinics through out the country.

With all the controversy over the proposed public option for health care reform, It is important to note that we already have public options in other areas. Take education for instance. There is a well entrenched public option known as public schools. Those who want the private option can send their kids to private schools. The public option educates every child at tax payer expense. No child is charged individually. Poor children whose parents are taxed less get to go to school with children from more prosperous families who pay more. Since most public schools are financed primarily with local property taxes, renters with lots of children get to go to school for free while their landlords subsidize their schooling. This is not only socialism where everyone pays according to what they make; it's communism - from each according to their ability and to each according to their needs.

Public options and private options stand side by side in many areas. There are public colleges and private colleges. Their are public police and private police (security guards). There is public transportation and private transportation (private jets, for instance). There are public book stores (libraries) and private book stores (Barnes and Noble, for instance). There are public parks and private parks (resorts and country clubs). Generally speaking, those with lots of money prefer private options and those with less money prefer public options. In some areas (fire protection, for example) there are few private options readily available. Fire departments are almost totally socialized if not communized although private fire departments are starting to spring up in wealthy enclaves. They will save a burning house even if it belongs to a poor person who doesn't pay any taxes. No one gets excited about communism when it comes to the local fire department. Of course, some fire departments are run by volunteers usually in rural areas.

So why are some people so excercized over a public option in health care? Isn't health care more important than education? Those with lots of money can always buy gold plated insurance policies - those that provide them with catered meals from 5 star restaurants when they have to go to the hospital. They can choose to have hospital rooms with all the amenities equivalent to a 5 star hotel. They can have manicurists, pedicurists, masseuses - the full on spa treatment. This is possible for those who can pay. Having a public option for health insurance does not limit the luxuriousnes of a hospital stay for those who can pay. So why do they begrudge poor people and middle class people at least basic health care at a reasonable price? Basically, because they don't want to share their immense wealth with the poor needy folk. 70% of the world's poor people are women and children, but this makes no difference to them. They adhere strongly to the principle that what's theirs, no matter how ill-gotten, is theirs and governments don't have a right to take it away from them and give it to someone more needy, that they worked hard for it. Well how hard do health insurance CEOs actually work to earn $400,000 per week? That's pretty hard work, I'd say.

Perhaps a slight bit of context is in order, however: it has struck me that Aetna’s Ronald Williams received $24,300,112 last year. That’s $467,309.85 per week. That’s a house. Maybe not a house that Mr. Williams would live in, but a house nonetheless. The man makes a house a week. And interestingly enough, if Mr. Williams were to eschew the purchase of a house on any given week and instead look to deposit the money in a bank– in order to remain FDIC insured (up to $250,000)– he would actually need to open more than one account–every week. Lest we lament the fate of the other CEOs on the list, in 2008 Ms. Braly had to get by on $189,311.76 per week, and Mr. Hemsley had to somehow manage on $62,327.73 per week (but perhaps he was able to save a little from last year when he made $253,164.02 per week).

The point is that rich people don't earn what they get paid through hard work. They earn it because they are in a position to take it. They earn it by virtue of their position. There is no moral equivalence or relationship between the amount of work that they do and the amount of money that they make any more than there was a moral equivalence between the amount of work Louis XIV did and the amount of money he made. Bill McGuire of United Health Care took home over a billion dollars in 2006. That's over $500,000 an hour considering that there are 2000 work hours in a year. Did he really work that hard in order to make $500,000 an hour? Of course not. He didn't work any harder than an eighteenth century English lord or a seventeenth century French king. The idea is not to work hard but to be in a position to command that kind of money. It's the modern equivalent of feudalism and the super wealthy are today's lords and kings while the rest of us are modern day peons and serfs.

To be paid in accordance with one's work is socialism. To be paid in accordance with one's profits is capitalism and to be paid in accordance with one's needs is communism. Therefore, when people talk about how hard someone worked to earn what they got, they're talking about payment in a socialist economy. I'm tired of hearing the cliche - hard earned money. For health care CEOs, what they earned was based on profit not hard work.

Therefore, I'm proposing an expansion of the public option into other areas. Why shouldn't there be a public option for food, for example? The technology of food production is well known. Let the government provide a public option that would not only compete with the available private options, but, more importantly, provide jobs for people that the private sector is not providing. Additionally, public option food industries could see to it that the food they produced was actually fit for human consumption and wasn't laced with pesticides, herbicides, growth hormones and antibiotics. Mature technologies can easily be replicated by public entities that can produce products cheaply and offer competition to the private sector and provide jobs for the unemployed. The private sector's goal is to eliminate jobs; the public sector's goal should be to provide them and to provide more affordable products. Private water companies want to privatize the water supply which until recently was something that was totally in the public sector. Well if they want to compete with the public option for water, let them. Just don't let them monopolize a resource that is necessary for basic survival. They will soon lose interest if they have to compete with a public option.

Let there be a public option for fast food which is an immense profit center. Let there be a public option for TV sets, for automobiles, for furniture, for building materials. In some areas private industry will outcompete the public option. So be it. Especially when it comes to innovation and entrepreneurship, I would expect private enterprise to outcompete public options. But lest we forget some of the greatest advances in science have come from government laboratories. In other areas especially where private profits are immense and especially in mature industries, the public option will outcompete the private option. I understand that in Sweden one of the largest fast food chains is or was publicly owned. Also all the liquor stores are publicly owned (Systembolaget). Let public options compete with private options in all areas of the economy. That will not only bring costs (and hence profits) down, but also it will provide more jobs than will be provided in sectors of the economy which are entirely privately owned.

Let 1000 public options bloom! Why should the private sector have a monopoly?

She's 97 years old and homeless. Bessie Mae Berger has her two boys, and that's about all.

She and sons Larry Wilkerson, 60, and Charlie Wilkerson, 62, live in a 1973 Chevrolet Suburban they park each night on a busy Venice street.

For the most part, it's a lonely life -- days spent passing the time away in public parks, parking lots and shopping centers around the Westside.

Occasionally, when they need cash, Bessie sits by the side of the road and seeks handouts. She holds a cardboard sign in her lap: "I am 97 years old. Homeless. Broke. Need help please."

This has attracted attention -- both wanted and unwanted.

Randall Zook, a Culver City TV advertising producer, pulled over on a recent day when he saw her holding the sign in front of a Costco on Washington Boulevard.

"This little lady hit me deeply. I said I have to do something. I just can't pass by her," Zook said. "I went over and talked to her and was moved by her dignity. She wasn't begging. She just asked, 'Do you have a home for me?' "

Zook didn't, but he gave her "more money than I've ever given anyone."

For everyone who gives, there are many others who just drive by or simply stare.

"It makes me feel like I'm a bum," Bessie said. "I don't mind living at the mercy of the public because some of the public is good -- they're nice to me. But there are some that are nasty. Some of them laugh at me and my sign. They say they don't think I'm 97 years old."

Reaching slowly into a pocket, she pulls out a laminated California state identification card that shows her date of birth: March 2, 1912.

Los Angeles police have warned her not to beg. And some passersby have turned to her sons, questioning why they cannot properly care for her.

"They ask why we aren't able to get her off the street. But we can't. I have no income whatsoever," Larry Wilkerson said.

"A few days ago, my mother was sitting out with a sign over at Lincoln and Olympic. We were sitting four hours and she was doing pretty good. But then a police officer came along and said, 'You can't do this' and ordered us off."

Nighttime is the most uncomfortable part of their lives.

About 8:30 p.m., when Bessie tries to fall asleep, they use magnets to stretch a thin blue blanket over their SUV's windshield to block the streetlights.

Charlie and Larry listen to a battery-operated portable radio-TV (the television doesn't work) or chat quietly until about 10, when they try to doze off.

They sleep fitfully against the backdrop of cars roaring down Venice Boulevard and the distinctive screech of MTA buses.

Bessie spends the night hunched over and wrapped in blankets.

Larry curls up in the back seat and Charlie folds himself into the rear of the Suburban, moving aside a tool box, a gas can, piles of clothing and boxes holding food and other possessions. The largest items are stacked outside.

They awaken about 7, when the morning commuter rush is beginning and the sun is starting to peek through the trees that shade the neighborhood near the Venice Public Library.

After reloading the Suburban, they drive to a nearby Albertsons supermarket. There, they wash up in a restroom in the back of the store.

On their way out, they buy bananas and small containers of yogurt or cottage cheese for Bessie, and sandwich fixings -- often sliced turkey -- and grapes and other fruit for Charlie and Larry.

They eat inside the Suburban, Larry behind the wheel on the worn front seat and his mother at his side. Charlie sits on the back seat.

During the day, they make short trips in the battered vehicle, which they have spray-painted a flat black. The Suburban gets about six miles to the gallon, so they try to stick to Venice as they hunt for inconspicuous places to park for a few hours.

Weekdays, they pull into a Venice Beach parking lot, where they can enter for free with their disabled parking tag. They spend afternoons there, watching the sun set and hoping that circling sea gulls don't bomb the Suburban with sticky white droppings.

"We talk to other homeless people," Charlie said.

The three use the Westside Center for Independent Living in Venice as the mailing address for their monthly Social Security and disability checks.

Once a week they drive to Hollywood, where free showers are available at a drop-in center. Sometimes, free hot meals are served from a food truck. Last week they had a spaghetti dinner.

During this week's trip there, they encountered actor-comedian Kevin Nealon at a gas station. He bought gas for them and introduced them to Laugh Factory owner Jamie Masada, who gave them pizza for dinner and said he may attempt to organize a fundraising show for them.

They live mostly on Bessie's $375 monthly Social Security check, Charlie's $637 disability payments, Larry's $300 food stamp allocation and cash from bottles and cans they collect and recycle.

Bessie can add a few more dollars to the budget by panhandling. When she leaves the Suburban's front seat, her two sons ease her into a fold-up wheelchair they carry in the back.

Bessie was born in the Bay Area city of Richmond six weeks before the Titanic sank.

"My mother carried my oldest brother through the earthquake and fire in San Francisco," she said. "I've seen all the wars from World War I on down to the last one."

Bessie spent her young adulthood in Northern California and worked as a packer for the National Biscuit Co. until she was in her 60s. She gave birth to 11 children, eight of whom are still living. She remains in contact only with Charlie and Larry, who were both born in San Francisco, grew up in Santa Rosa and have high school educations.

Their father, who had worked in San Francisco-area shipyards and as a Hollywood stunt driver, died in 1966. In all, Bessie has outlived three husbands. Charlie has been married four times, and Larry was briefly married once. Neither has children.

Charlie worked in construction and as a painter before becoming disabled by degenerative arthritis. Larry was a cook before compressed discs in the back and a damaged neck nerve put an end to it. Twenty-six years ago, he began working as a full-time caregiver for his mother through the state's In-Home Supportive Services program.

That ended about four years ago, when the owner of a Palm Springs home where they lived had to sell the place. At the same time, the state dropped Larry and his mother from the support program, he said.

The three have tried at various times since to get government-subsidized housing. But they have failed, in part because they insist on living together.

They say they have driven the Suburban around the state looking for a housing program that will accommodate them. They have been in Los Angeles about eight months, following a stint in the Concord area.

They thought Bessie had finally qualified for federal Section 8 housing -- she had been promised a rental voucher, they say. But then she needed surgery to replace a pacemaker and spent three months in a recovery center. Housing authorities in Northern California awarded the voucher to someone else during her absence, according to her sons.

Living in the front seat is miserable, she said. Still, she is glad to at least have that.

The Suburban is a constant source of headaches for the three. It is riddled with rust, and a tailgate window is permanently stuck open. During a recent trip to a storage unit they rent in Palm Springs, the Suburban's rear axle broke. It cost them $600 to replace, they said.

As the season's first rainstorm approached, they purchased a large piece of plastic to duct-tape over the vehicle's rear window.

They would like to find a way to stay together in a house or apartment. Bessie qualifies for government-paid senior citizen assistance, but her two sons are too young.

"There's a million empty homes here in California, but they can't seem to find one we can live in," Larry said.

But help still might be available, said Shirley Christensen, assistant to the director of the Los Angeles County Department of Public Social Services.

Larry might qualify for Social Security disability benefits without having to sell the Suburban, as he had feared, if the old SUV is considered to have no resale value, she said. He and his brother might both qualify for general relief benefits.

At 97, Bessie is eligible for a referral to the county's Department of Adult Protective Services, Christensen said.

But that might not lead to a housing arrangement that will keep her and her sons together, officials acknowledged.

"Housing is really tough in L.A. County right now, but there are programs that provide housing assistance," said Mary Sanders, community liaison with the office that handles hotline screening for Adult Protective Services. "I'm not sure that would be with her and her sons."

If nothing else, a protective services caseworker could help the three determine whether they're receiving all of the benefits they are entitled to.

Told this, Larry took the protective services agency's phone number and said he would call.

The three were at Venice Beach, where Larry cursed at the swooping gulls that were splotching the Suburban with droppings.

Earlier this day, the three had spent $40 on a money order to pay for a Northern California storage unit and $52 to replace their pre-paid cellphone after it was accidentally doused with coffee. They use the phone for emergencies, to keep tabs on their storage spaces and to call the facility where they get their mail.

Larry watched a passerby glance with apparent disdain at Bessie's cardboard sign, which was taped to the Suburban's passenger-side window.

"They think we're liars," he said.

Bessie sat alone inside the vehicle as the blue blanket over the windshield shaded her from the late-afternoon sun.

October 15, 2009

It is clear that there is a bifurcation in the economy, a dichotomy if you will. On the one hand the Dow has hit 10,000. Whoopee! The economy is back on track. Or is it? There is still high and widespread unemployment. If anything, the Dow has an inverse relationship with employment. That is to say the more workers companies lay off, the more they reduce their expenses and the more Wall St cheers. According to Robert Reich: "Payrolls comprise 70 percent of most companies' costs, which means companies have been slashing jobs." Therefore, it's a good thing, from Wall St's point of view, to eliminate jobs. Just ask Chainsaw Al Dunlap. When he took over a company, the first thing he did was to "chainsaw" jobs. The jobs can be replaced by automation, computerization and robotization or by simply outsourcing the jobs to locales where labor is cheaper. The net result is that highly paid American workers are losing jobs that are never going to come back.

So Americans are being deluded that "jobs are a lagging indicator", that, if they're patient and wait long enough, their job or a job for them will magically reappear. The smart ones will create their own job. In fact this is the only way to guarantee oneself a job - create it yourself. How to do this should be part of everyone's survival kit. So why aren't they teaching it in schools? The whole educational system is set up in such a way that you earn credentials and degrees which are then sniffed over by your superiors (potential employers) and then you are granted access to the system based on your educational achievements. But it doesn't work that way any more. Employees are something to be minimized because they detract from the bottom line. It used to be thought that a good employee actually added to the bottom line, but not any more.

So where does this leave the job situation and how is one supposed to earn a living? The upper crust earns their living off of rents, dividends and interest or in other words off of the return to capital. After you accumulate a certain amount of capital, you can put your capital to work earning money so that you don't have to go to work to earn money. This is also called ownership. This is the fundamental rule of a capitalist society and one not taught in school. If you own things, you can rent them out. For all those who don't have sufficient assets to make money off of the return to capital, they are in the position of having to work for a living. But bad news on this front. There aren't sufficient jobs to go around. It used to be that the US was a nation of small self-sufficient farmers and craftsmen - yeomen, they were called. In other words prtactically everyone was self-employed. This was the kind of nation Thomas Jefferson envisioned. Then somewhere along the line we became a nation of landless job seekers. Not a good trade-off.

The educational system was supposed to be the key to getting a good job. Then the educational system started to ratchet up the requirements for getting a job: first a high school education, then a college education, then a Master's Degree, then a college education with a credential, then a PhD, then a post doc. It never ends! The educational system and the student loan creditors reap the profits while the poor job seeker goes further and further into debt. This is obviously not a winning strategy for the average American! That's why self-employment is the only sure way out of this morass. If you are self-employed, your job is secure. You can't be laid off unless you decide to lay yourself off. Self-employment is the answer to a jobless society. Localization of jobs is a way of returning to a nation of small farmers and craftsmen. That's why Farmers' Markets are gaining in popularity.

It's becoming more obvious that the US can't provide jobs for all its citizens. Government policy under Republican administrations has encouraged offshoring of jobs. Profits can be offshored to create jobs overseas, and those profits remain untaxed until they're repatriated. If they are invested overseas, they are never repatriated. GM is investing in automobile plants in China, and then those cars, in addition to being sold in China, will be imported to the US. Where does that leave US autoworkers? Without a job I'd say. Corporate America has no obligation to provide American workers, no matter how highly educated, with jobs. That part of the social contract (if it ever existed) is broken.

What is the government's role in this? That depends on which government we are talking about. A Bush-Cheney government is radically different from an Obama-Biden government. In Bush-Cheney world, essentially the neocon world, 20% of the American population will effectively be cut out of participation in the economic system. These would be the jobless, the homeless, the unpropertied, the poverty stricken. It's perfectly acceptable to Republicans to have 20% or even more of the population economically disenfranchised. The economy can hum along perfectly nicely without them. They are superfluous. The economy doesn't need their labor. So they are essentially in the position of becoming serfs except serfs actually had jobs. Labor was less machine intensive in those days. They were actually needed to make the economy hum. So this percentage of the American population will join the Third World poor. They will be the post-development poor, the post-advanced-industrial-society poor, the unneeded, the redundant, the jobless, the homeless. Third World societies hum along very nicely (for the rich) without them. Their only choice will be to join the military which is the only choice in the Third World. There will always be money for militarism, the only government program that seems to have universal support. The divide between the rich and the poor will grow to astronomical proportions. The US in a ghastly rapprochement with the rest of the world will harbor a segment of its society exactly identical to the Third World poor who make their living scrounging in garbage dumps.

Under Democratic administrations, the government will actually try to help the poor, the dispossessed and the jobless-homeless. Extended unemployment and welfare benefits and other job creation programs will alleviate the suffering at least for some people at least temporarily. But this will create problems in that the wealthy will not want to subsidize the poor with their tax money. The wealthy will use all tools at their disposal including buying off Congress to insure that the peonage class remains in poverty. They won't want to share their exclusive ownership of the means of production with the jobless and homeless. For the peonage class voting will be long forgotten. They won't have the emotional wherewithal to go out and vote much less to lobby Congress. Politically and economically powerless, they will acquiesce to living on the streets and in tent cities, eating meals provided by homeless shelters and other charities which are literally the scraps from the tables of the rich. With limited access to health care the homeless-jobless peons will live lives that are nasty, brutish and short especially under Republican administrations. This will verify Darwin's Survival of the Fittest dictum.

Inequality will reach new heights in this Brave New World, a two tier world in which the US will achieve a ghastly parity with the Third World in terms of its relative proportions of those living in total luxury beyond anyone's wildest imagination and those living in degradation and immiseration beyond anyone's wildest imagination. There will also be a small middle class consisting of indentured servants with tons of student loan, credit card loan, mortgage loan and auto loan debt.

With the official unemployment rate nearly 10 percent, now is no time to let talk of recovery deter us from concern for the suffering of the unemployed. The unemployment rate continues to grow and will likely do so even if a modest growth in statistical GDP is under way. Paul Krugman points out that “comparing actual GDP since the recession began with what it would have been if the economy had continued growing at its 1999-2007 trend, we’re something like 8 percent below where we should be. That translates into lost output at a rate of well over a trillion dollars per year (as well as mass unemployment). And we’ll keep suffering those losses, even if GDP is now growing, until we have enough growth to close that gap. Since there’s nothing in the data or anecdotal evidence suggesting any gap-closing in progress, this is a continuing tragedy.”

To this day, much of the mainstream media underplays the human tragedy here. Since the stock market has rebounded at least partially, it becomes easy to assume that the worst is now behind us. Only a small minority of U.S. workers, however, has any significant stake in the market, which itself has historically been a poor predictor of economic trends.

Conventional analysts also assume that the unemployed are receiving unemployment compensation from the government and therefore can’t be suffering too much. These optimistic sentiments emanate from comfortable, affluent pundits. Many not only failed to foresee severe economic decline but also even denied its possibility. In addition, many of those same pundits have fought to — and succeeded in — reducing the scope and adequacy of the unemployment insurance system. As the ranks of the unemployed continue to rise, it is all the more imperative as a matter of both social justice and long-term economic growth to reform and expand the unemployment insurance system.

The New York Times recently reported that the number of Americans seeking work equaled about six times the number of job openings. As this figure only continues to get worse, the number of workers whose unemployment has been prolonged and who have exhausted or shortly will exhaust their benefits continues to grow as well.

The House of Representatives has recently passed legislation that would enable states with an unemployment rate of 8.5 percent or above to extend benefits for another 13 weeks. Since Maine is now above this cusp, it stands to gain if the Senate approves this legislation. This would be a modest positive start, but it just begins to address the limits of the system.

In 1975, more than half of unemployed workers qualified for benefits. By 2008, only 37 percent of workers qualified. With more employers relying on part-time employees and more workers able to work only part time, the limitation of unemployment insurance to full-time workers is a grave injustice to today’s work force. Maine covers part-time workers, but many other states do not.

The existing system was crafted as part of a New Deal-era compromise to obtain enough Southern Democrat votes for passage. This system grants considerable flexibility to the states. In practice this has meant extreme disparities in amounts paid and in eligibility requirements and has worked to the disadvantage of women and minorities.

Now is a propitious time to make long-term improvements of the system. These should include at a minimum expanded benefits for dependents, discounting or providing health care, requiring coverage of part-time workers and ending taxation of unemployment benefits.

Conservatives often argue, as did Georgia Republican John Linder, that unemployment insurance “only encourages people to stay unemployed, rather than take even low-paying jobs.” Yet since the levels of compensation as a percentage of employment income is small and the number of jobs for each active seeker very limited, this argument is hard to advance with a straight face. And if more employers provided living wages and better working conditions, such arguments would be even harder to sustain.

More broadly, how can Congress worry so much about the purportedly corrupting influence of unemployment insurance when the safety net it provides investment bankers is hundreds if not thousands of times more generous? When those bankers are lazy or careless, they do vastly more harm than any unemployed clerk or janitor.

Wednesday, October 14, 2009

Why the Dow Broke 10,000, and Why You Should Still Watch Your Wallet

How did the Dow break 10,000 when the rest of the economy is in the toilet?

1. Corporate earnings are up -- mainly because companies have been cutting costs. Payrolls comprise 70 percent of most companies' costs, which means companies have been slashing jobs. In the end, this is a self-defeating strategy. If workers don't have jobs or are afraid of losing them, they won't buy, and company profits will disappear.

2. Federal borrowing has filled the gap that consumers and businesses created when the latter began to reduce their debt. Federal debt, in other words, has kept the economy from tanking. Can't keep up forever, though.

3. With such horrid employment numbers, Wall Street figures the Fed will keep interest rates low for some time, and continue to flood the economy with money. That's good news for the Street because it means money stays cheap -- and with cheap money the Street can make lots of bets on almost everything under the sun and moon. As a result, the Street's earnings are way up. But this, too, is temporary. At some point the Fed is going to worry about inflation and a falling dollar.

4. Investors of all stripes want to get in early and ride the wave. Pension funds, mutual funds, and other institutional investors figure the bull market has more oomph in it because, well, other investors will jump in. Think Ponzi scheme. Nice for now, but watch out if you're one of the last in.

In other words, this is all temporary fluff, folks. Anyone who hasn't learned by now that there's almost no relationship between the Dow and the real economy deserves to lose his or her shirt in the Wall Street casino.

October 13, 2009

Monday, October 12, 2009

The Audacity of Greed: How Private Health Insurers Just Blew Their Cover

The health-insurance industry has finally revealed itself for what it is.

Background: The industry hates the idea that's emerged from the Senate Finance Committee of lowering penalties on younger and healthier people who don't buy insurance. Relying on an analysis by PricewaterhouseCoopers, insurers say this means new enrollees will be older and less healthy -- which will drive up costs. And, says the industry, these costs will be passed on to consumers in the form of higher premiums. Proposed taxes on high-priced "Cadillac" policies will also be passed on to consumers. As a result, premiums will rise faster and higher than the government projects.

It's an eleventh-hour bombshell.

But the bomb went off under the insurers. The only reason these costs can be passed on to consumers in the form of higher premiums is because there's not enough competition among private insurers to force them to absorb the costs by becoming more efficient. Get it? Health insurers have just made the best argument yet about why a public insurance option is necessary.

Right now they run their markets and set their prices, and pass on any increased costs directly to consumers. That's what they're threatening to do if the legislation attempts to squeeze, even slightly, the colossal profits they plan to make off of thirty million new paying customers.

They want every penny of those profits. They demand every cent. And if the government dares raise their costs a tad higher than they expected when they first signed on to support the bill, they'll pass those costs on to consumers in the form of higher premiums. They can carry out their threat only because they have unaccountable, untrammeled market power.

But they've now hoisted themselves on their own insured petard. They've exposed themselves. If they had to compete with a public insurance plan, they couldn't get away with this threat. They couldn't pass on the extra costs. They'd have to compete with a public insurance option that forced them to give consumers the best deals possible.

Now's the time for Congress and the White House to say to the insurance industry: You want to play hardball? Okay. We'll play it, too. You didn't want a public insurance option. That was one of your conditions for supporting the bill. You wanted gigantic profits from having thirty million new paying customers and the market to yourself. The Senate Finance Committee and the White House agreed because they wanted your support and were afraid of the negative ads and hurricane of opposition you could finance. But you're even greedier than we imagined. And now you've demonstrated that greed to the American people. They don't want to turn over even more of their hard-earned money to you. So, insurance companies, we've got news for you. We're going to make sure Americans have the freedom to choose a public insurance option that's cheaper and better, and you're going to have to work hard to keep them your customers.

American billionaires keep cooking up scheme after scheme to shake down Americans and plunder the national wealth, as if the last one was too easy and boring.

American billionaires keep cooking up scheme after scheme to shake down Americans and plunder the national wealth, as if the last one was too easy and boring.

Every day and every week we hear another shocking story about how our billionaires have cooked up an even sicker scheme to shake down Americans and plunder the national wealth, as if the last scheme was too easy and boring. They don’t even bother hiding it anymore: take the story about the “Death Bonds” I wrote about last month, first reported (however blandly) in the New York Times: the very same Wall Street bankers who conned $23 trillion out of America’s wealth is now going to use some of that play money to place bets on when we Americans will die—and the sooner we die, the more billions in E-Z profits Wall Street will earn.

It’s as if America is some kind of despised abstraction to our ruling class: a faraway colony to plunder, a mass of humanity to use and exploit as it sees fit. In fact, there’s a pretty clear pattern developing of just how much they despise Americans and how little they value our lives and our humanity.

It’s painful to admit this, but the way our 21st century American ruling class treats the rest of us is eerily reminiscent of the great Russian novel Dead Souls, about the 19th century Russian ruling class’s beastly treatment of its serfs (also called “souls”), back when most Russians were essentially slaves, legal property of the ruling class. Dead Souls features one of the most grotesque shysters in any novel: he comes up with a get-rich-quick scheme that’s eerily similar to today’s Wall Street’s latest schemes: the shyster goes from village to village, buying up “dead souls” (or “dead serfs”) who are still on the census rolls of the local landowners. The dead serfs are of no use to their owners anymore, so the landowners are happy to make one last ruble off their dead serfs by selling ownership rights over them to the shyster. The shyster’s plan: to acquire so many “dead souls” that he can package them into valuable collateral, and take out a huge loan against his “dead souls” which will finally make him rich. Wealth spun out of nothing but human misery, so that the shyster can waste huge amounts of money impressing others from the serf-owning class.

In other words: Dead Souls Loans.

Fast-forward to America in 2009, and now we’re the dead souls. Top American corporations are taking out “dead peasant insurance” on their workers without the workers even knowing it—and cashing in hundreds of thousands or millions of dollars on their employees, even though often times they don’t even offer those same employees decent health insurance coverage to allow them to survive illnesses. To top it off, these “dead peasant insurance” payouts are tax-free for the corporation that cashes in. It was a revelation so revolting that even ABC’s News’ mannequins admitted they were “stunned.”

In fact, as I said, they shouldn’t be stunned. It’s part of an ongoing pattern for our ruling class and their view of America and Americans. It’s time we faced up to this grim fact. Too many of them are against us and against this country, weakening America to the point where it threatens to be permanently crippled, much like how the communists deformed Russia for decades. They had their bolsheviks; we have our billionaire-bolsheviks. The effect of these two rapacious ruling elites is the same: the state and the people serve the tiny ruling class; and when we’re not serving them, we can fuck off and die. Literally. Because that serves them too.

For practical purposes, here is a small handy list of 8 Reasons To Hate Our Billionaire Bolsheviks [or "The H8 8"]:

What Lies Beneath the War in Afghanistan

Truth is war's first casualty. The Afghan war's biggest untruth is, "we've got to fight terrorists over there so we don't have to fight them at home."

Many North Americans still buy this lie because they believe the 9/11 attacks came directly from the Afghanistan-based al-Qaida and Taliban movements.

False. The 9/11 attacks were planned in Germany and Spain, and conducted mainly by U.S.-based Saudis to punish America for supporting Israel.

Taliban, a militant religious, anti-Communist movement of Pashtun tribesmen, was totally surprised by 9/11. Taliban received U.S. aid until May, 2001. The CIA was planning to use Osama bin Laden's al-Qaida to stir up Muslim Uighurs against Chinese rule, and Taliban against Russia's Central Asian allies.

Al-Qaida only numbered 300 members. Most have been killed. A handful escaped to Pakistan. Only a few remain in Afghanistan. Yet President Barack Obama insists 68,000 or more U.S. troops must stay in Afghanistan to fight al-Qaida and prevent extremists from re-acquiring "terrorist training camps."

This claim, like Saddam Hussein's non-existent weapons of mass destruction, is a handy slogan to market war to the public. Today, half of Afghanistan is under Taliban control. Anti-American militants could more easily use Somalia, Indonesia, Bangladesh, North and West Africa, or Sudan. They don't need remote Afghanistan. The 9/11 attacks were planned in apartments, not camps.

The United States should not be waging war on Taliban. However backwards and oafish its Pashtun tribesmen, they have no desire or interest in attacking America. Even less, Canada.

Taliban are the sons of the U.S.-backed mujahidin who defeated the Soviets in the 1980s. As I have been saying since 9/11, Taliban never was America's enemy. Instead of invading Afghanistan in 2001, the U.S. should have paid Taliban to uproot al-Qaida.

The Pashtun tribes want to end foreign occupation and drive out the Afghan Communists, who now dominate the U.S.-installed Kabul regime. But the U.S. has blundered into a full-scale war not just with Taliban, but with most of Afghanistan's fierce Pashtun tribes, who comprise over half the population.

Obama is wrestling with widening the war. After eight years of military operations costing $236 billion US, the U.S. commander in Afghanistan just warned of the threat of "failure," a.k.a. defeat. Canada has so far wasted $16 billion Cdn. on the war. Western occupation forces will be doomed if the Afghan resistance ever gets modern anti-aircraft and anti-tank missiles.

The U.S. is sinking ever deeper into the South Asian morass. Washington is trying to arm-twist Pakistan into being more obedient and widening the war against its own independent-minded Pashtun tribes -- wrongly called "Taliban."

Washington's incredibly ham-handed efforts to use $7.5 billion US to bribe Pakistan's feeble, corrupt government and army, take control of military promotions, and get a grip on Pakistan's nuclear arsenal, have Pakistan's soldiers on the verge of revolt.

Obama has been under intense pressure from flag-waving Republicans, much of the media, and the hawkish national security establishment to expand the war. Israel's supporters, including many Congressional Democrats, want to see the U.S. seize Pakistan's nuclear arms and expand the Afghan war into Iran.

Obama should admit Taliban is not and never was a threat to the West; that the wildly exaggerated al-Qaida has been mostly eradicated; and that the U.S.-led war in Afghanistan is causing more damage to U.S. interests in the Muslim world -- now 25% of all humanity -- than Bin Laden and his few rag-tag allies. The bombing in Madrid and London, and conspiracy in Toronto, were all horribly wrongheaded protests by young Muslims against the Afghan war.

We are not going to change the way Afghans treat their women by waging war on them, or bring democracy through rigged elections.

I wish Obama would just declare victory in Afghanistan, withdraw western forces, and hand over security to a multi-national stabilization force from Muslim nations. Good presidents, like good generals, know when to retreat.

Of Health Care, War, Costs and Consequences

The ways Americans analyze these two policy issues are incongruous.

In the next few weeks this country will make two decisions of great consequence: Will we send additional troops to Afghanistan? Will we reform our health care system?

It is both instructive and disheartening to see the different ways our policymakers approach these issues.

When it comes to health care, the emphasis is on costs. When President Obama introduced his health care reform initiative, he justified it as a way to lower health care costs and help the economy. Later he pledged to a joint session of Congress, "I will not sign a plan that adds one dime to our deficits -- either now or in the future. Period."

A few days ago the Congressional Budget Office (CBO) gave health reform a green light when it concluded that the Senate bill wouldn't add to the deficit. The $800 billion additional cost would be offset, in large part by cutting spending in another part of the health care sector -- Medicare.

When it comes to the Iraq and Afghanistan wars, on the other hand, talk of costs and deficits disappears. When Obama sent an additional 21,000 to Afghanistan earlier this year, neither party discussed the cost. A few days ago the Senate voted 93-7 to fund those additional troops, bringing to $1 trillion the amount we've spent in Iraq and Afghanistan. No member of either party talked about costs. The CBO was not asked to analyze the impact on the deficit of sending additional troops. And unlike with health care reform, the Pentagon was not required to offset the increased costs of the Afghanistan war by cutting spending in other parts of the military budget.

Why do we approach these two crucial issues so differently? Some would say the answer is obvious: War is a matter of national security. It certainly is. We need to defend ourselves against our enemies. But if protecting American lives is the objective, the absence of health care undermines our national security far more than terrorism.

In the 9/11 terrorist attacks, 2,800 died. According to a study recently published by the American Journal of Public Health, that is the number of Americans who die every three weeks because of lack of access to health care. Since we intervened in Iraq, about 300,000 Americans have died from lack of health care, about the number of American soldiers killed in World War II.

Indeed, the national insecurity resulting from our actual lack of health care is far greater than the number who die from it. Tens of millions of Americans worry about losing their health insurance, or having their insurance company deny their medical claims. Medical expenses significantly contribute to about 50 percent of personal bankruptcies. In about 30 percent they are the primary factor.

We will never achieve real, effective and universal health care until we treat the lack of it as a national security issue. Perhaps we could start by adopting some of the language used to justify war. If Obama chooses to maintain or reduce current troop levels, his opponents will undoubtedly criticize him for adopting a policy of "cut and run."

Consider that the Senate health care bill will still leave 25 million uninsured. By one estimate, that translates into 25,000 avoidable deaths annually. Why then aren't we saying that when it comes to saving American lives, the Senate has adopted a policy of "cut and run"?

Health care is a national security issue. Our policymakers need to approach it that way.

Watch the video Rethink Afghanistan by Robert Greenwald. The whole issue boils down to the fact that we don't want the wrong people to get ahold of Pakistan's nuclear weapons. It's not about Afghanistan at all. Al Qaeda isn't even in Afghanistan. They were at one time, but they're no longer there. As one person says in the video, Afghanistan is in the position of being a hotel owner who at one time had a very bad guest, and now we're punishing the owner of the hotel whose guest is no longer there.

So here is a potential solution: since Pakistan is nominally a friend, go to the Pakistan government and ask that that they turn over their nukes to a UN commission who will then destroy them. In return the world (not just the US) could provide Pakistan with both money and protection, and Pakistan will become a denuclearized country. Then there will be no reason to stay in Afghanistan at all. If Pakistan won't hand over their nukes, we simply take them from them. In either case, the war is over. The war in Afghanistan is simply turning the Afghan people against the US as civilian casualties mount. The idea that we're there to protect their women is bullshit. Women are worse off since the US invasion.

Here is the way to fight terrorists: by defensive police and intelligence work, not by full scale land invasions by armies. You have spies on the ground in all these places so that groups like Al Qaeda can't gain footholds or even toeholds. You monitor communications. You build up defenses in the US. You position rapid deployment forces offshore. You do what is achievable, but you can never guarantee absolute security. Securing the borders in the US from incursions by anyone, terrorist or otherwise, is doable and necessary. The borders should also be secured against the importation of illegal materiel whether drugs, guns, money or otherwise. This applies to materiel leaving as well as entering the US. All ports should be secured. This will do more to protect the US against terrorism than anything else. Also the FBI and the intelligence agencies must be on the alert against home grown terrorism as well as infiltration of terrorists from outside. The philosophy of "get them over there before they come over here" is nonsense.

Still eight years after 9/11 there is no procedure or system in place to guarantee that people entering the country on student visas leave when they're supposed to. They can just stay on and become illegals. This is unconscionable. Resources in this country aren't allocated intelligently and responsibly but in accordance with lobbyists' demands. It was student visas that produced 9/11, and we still don't have a way to track them.

Our prescence in Afghanistan is only prolonging the misery of the Afghan people. They would be better off under the Taliban. The thought that we are there to help them or to liberate Afghan women is ridiculous. Women and children are dying due to US airstrikes and from disease and loss of livlihoods. Internally displaced persons are dying from disease and malnutrition. The Taliban are not Al Qaeda. They do not have an international agenda. Al Qaeda is mobile and can spring up anywhere. When groups are located such as Al Qaeda which are hostile to the US and have the ability to strike at the US, they should be taken out not by the army but by special forces who can strike quickly and leave. George Will had a piece about locating rapid deployment forces off shore which makes a lot of sense. Counter insurgency doesn't.

Wars in Iraq and Afghanistan are bankrupting the US while at the same time making us less safe as we are increasing ill will towards us with every innocent civilian that is killed or displaced or dies from disease in refugee camps. If Pakistan's nukes are a threat, and I think they are, this threat should be dealt with directly and not by harming a nation that left to its own devices is no threat to the US. If the worst that happens is that the Taliban take over Afghanistan, so be it.

The recent elections in Afghanistan have been shown to be fraudulent. Why are we there to prop up a corrupt government? It's deja vu all over again as Yogi Berra said. Mission creep in Afghanistan mirrors mission creep in Iraq mirrors mission creep in Vietnam. If the Soviets couldn't "win" with 500,000 troops, what makes us think we can "win" with fewer than that? At a time of ginormous budget deficits and national debt, we can't afford this stupid war in Afghanistan. Denuclearize Pakistan instead!

Everyone wants and needs a job. Joblessness is the growing scourge of the planet here in the US and around the world. The reason why people are poor or homeless is that they don't have a job and they can't get a job. This should be obvious to everybody. It's not that people don't want to work. Sure there are those who can't work due to ill health or for some other reason, but most able bodied people want to work, and make no mistake about it, taking care of children is more than a full time job. It's work that often doesn't get credit for being work. Caregiving is work which often exceeds an eight hour day or even a twelve hour day. There are no limits to the time involved.

The current spate of joblessness in the US is nothing new. What should we expect when it has been US government policy for years to export jobs? The government has encouraged corporations to outsource jobs in order to take advantage of cheap foreign labor. Perot's "giant sucking sound" has become reality. Eventually you come to a point where there aren't enough jobs for US citizens. The unfortunate fact is that hardly any consumer products are manufactured in the US. Try buying something at Wal-Mart that's not manufactured in China. 70% of US GDP is comprised of consumption and that consumption is in large measure produced abroad. The US economy supports jobs in China, Taiwan, South Korea and elsewhere. What's happened in the current recession is that US consumption is down because Americans don't have the wherewithal to consume any more now that they can't take equity out of their houses to support consumption. But that leads to job losses in China not here. What leads to joblessness here is that the jobs have already been shipped to China according to US government policy.

And I don't think we can educate our way out of this dilemma. The notion that Americans just need more education in order to find a job is bogus. So what is to happen to Americans who are going to end up chronically unemployed? It depends on which administration is in power, and it depends on what individual states do to combat poverty and homelessness. With the current administration unemployment benefits will probably be extended giving a lifeline to the "new poor." With a Republican administration, America's poor will join Third World poor in fending for themselves in any way that they can. Extended unemployment comes at a price though. The money can't be borrowed indefinitely. Therefore, taxes have to be raised on the rich and those who still have jobs to support those who don't. This amounts to redistribution or sharing of resources. So like it or not, if the US isn't to degenerate into a Third World country, resources have to be shared. Those fortunate enough to have discovered profit centers must share with those who are unfortunate. Some ideas will have to be discarded like the idea that each person has the right to everything that he or she produces.

Public options in basic consumer goods need to be considered to bring prices for basic commodities down and to provide for those unable to shop regular stores and supermarkets. This is similar to allowing for a public option in health care or in education, the idea being that the government can produce things more efficiently and at a lower price once the profit margin has been removed. However, the private sector needs to be preserved and protected without government interference for entrepreneurial activities because that's where true innovation takes place. For mature industries there's no reason why the government can't produce more efficiently.

More government organization of the economy is needed because 1) private enterprise is not creating the necessary jobs and 2) money needs to be shifted from wealthy to poor in order that those poor can remain consumers of at least the basic items needed to sustain life and to alleviate poverty. The conservative argument that the poor are lazy and everybody should just go out and get a job doesn't hold water when there is widespread unemployment and joblessness, when the jobs aren't being provided by private corporations and businesses, and the jobs are being shipped off shore. If private enterprise can't or won't create jobs, then government must do it as a last resort. This implies shifting resources from wealthy to poor.

In the Third World this is even more important. Something like a sixth of the world's population doesn't even have clean water or basic sanitation. Many are dying from preventable diseases. Wealthy nations and charities must help to a greater extent in providing basic necessities for those unable to provide for themselves due to climate change, war and loss of livlihoods due to other causes. At any given moment a large percentage of the human race is dependent on someone else. Children are dependent on their parents. Old people are dependent on caregivers. Wives are dependent on husbands to make a living. It is not shameful to be in a condition of dependency. If an economy is well organized, jobs will be created which reduce dependency, but wives working in the work force just shifts the dependency of their children from mothers to day care centers. Money is just shifted from the mother to the day care center whereas it might make more sense for the mother to stay home with the children and be dependent on her husband as the income provider.

Values have to change from "rugged individualism" to those of the fortunate helping the less fortunate and not just in token ways but in major comprehensive ways. This means that government has to be involved in the process and money has to be transferred from rich to poor.

(CNN) -- Hamburgers are an American passion. And millions of Americans consume burgers, and other forms of meat, every day without consequences.

Should Americans continue to make meat -- and particularly hamburgers -- part of their diet?

But ground beef contaminated with E. coli bacteria has sickened, paralyzed and even killed some people who ate it.

On Monday night's "Larry King Live," a wide range of guests joined an in-depth and spirited debate to answer this question: Should meat, and most specifically hamburgers, be a part of the American diet?

One person who has said "no" to burgers is Bill Marler, an expert on foodborne illness litigation. Marler has been litigating on this issue since the Jack in the Box E. coli outbreak in 1993.

"Since the Jack in the Box case, I've never had a hamburger," Marler said. "I have three daughters -- 17, 14 and 10 -- and they've never had a hamburger.

"What happens in hamburger is the E. coli bacteria is in the guts of cows. And during the slaughtering process, those guts are nicked or there's fecal material on the hides. It gets on the red meat," Marler explained to King.

"And when you cook a steak, assuming that steak hasn't been penetrated, you can kill the bacteria that's on the outside of the meat. It's not on the inside of the meat. But when you ground that meat up, that E. coli is in there," he said.

For Barbara Kowalcyk, the issue is professional -- she's director of food safety at the Center for Foodborne Illness Research and Prevention. But the issue is also deeply personal -- her 2-year-old son, Kevin, died of complications due to E. coli infection in 2001.

Kevin "went from being a perfectly healthy, beautiful child to being dead in 12 days. It was unbelievable," Kowalcyk told King.

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Despite her devastating loss, Kowalcyk and her center are not taking a total stand against meat.

"We do not want to tell people what to eat or what not to eat," she said. "We want consumers to have the information they need to make educated choices about what they feed themselves and their loved ones. And we want better protections in this country for food. Americans believe that their food is safe, and they have a right to know the risks."

Patrick Boyle, president and CEO of the American Meat Institute, told King that the stories of people sickened or killed by E. coli infection are tragic, but there is a wider context.

"Americans consume a billion meals a day -- the vast, vast, vast majority of them safely and enjoyably," Boyle said. "And the positive development here is that these kinds of tragic illnesses are decreasing in America. These illnesses are down 60 percent in the last 10 years. So we are making significant progress."

Two steps are available to eliminate E. coli in the ground beef supply, Boyle said. One is irradiation, which is not widely used. The second is through proper cooking of the product.

For another guest, even the promise of contamination-free beef wasn't enough. Dr. Colin Campbell of Cornell University advocates a meat-free diet.

"I think the closer we get to a plant-based diet -- I should say a whole foods plant-based diet -- the healthier we're going to be for all of us," Campbell said.

Campbell said he grew up on a dairy farm and for a long time held to the belief that animal protein was an essential part of a healthy diet. He said the results of years of research changed his mind.

The conclusion of his studies: "The closer we get to consuming a whole foods, plant-based diet, the healthier we're going to be on all accounts."

His research wasn't selling for Nancy Rodriguez, a professor at the University of Connecticut. She says meat is a key part of a good diet.

"I think that animal proteins provide essential nutrients that you are able to get in a unique package of foods for, let's say, about 200 calories -- a three ounce serving of meat," Rodriguez said. "And I think that when you make a choice to eliminate those animal products from your diet, it becomes a challenge, particularly for certain vulnerable populations such as infants and children, to get those nutrients in."

Rodriguez said people choosing a vegetarian diet have to be extra diligent to supplement their diet with iron, zinc and calcium.

Chef Anthony Bourdain, host of TV's "No Reservations," doesn't have a problem with meat consumption, but he has a big problem with how animals are raised and slaughtered.

"We have eyes in the front of our head. We have fingernails. We have ... teeth and long legs. We were designed from the get-go ... so that we could chase down smaller, stupider creatures, kill them and eat them," Bourdain said.

"That said, we may be designed to eat meat. We are not designed to eat fecal choliform bacteria," Bourdain said. He went on to blast the practices of larger meat processor and grinders as "unconscionable and border on the criminal."

Despite his disdain for meat industry practices, Bourdain thinks the push for an all-vegetarian diet is off-base.

"People eat meat because it's delicious. Let's not forget the pleasure aspect of this argument. People eat meat because they like it. It tastes good. It smells good when it's cooking," Bourdain said.

"I think certainly we could eat better in this country. It would probably not be a bad thing if we ate less meat, if the ratio of animal protein to vegetables changed along the lines of the Chinese model. But to talk about eradicating meat is silly."

For one of Bill Marler's clients, 22-year-old Stephanie Smith, this debate has painful meaning.

In the fall of 2007, her nervous system was ravaged. She was left paralyzed after eating an E. coli-tainted ground meat patty. Marler talked about her recovery:

"She just entered into a rehab center today. The kid wants to dance again. I think it's very unlikely, but she's going to give it a shot. She's going to be in for six months. They're going to work, you know, hard physical therapy, occupational therapy. But she's got a long road to hoe. She's got risk of kidney failure. She suffered brain damage. And ... whether she'll walk again is another thing."

King asked Marler how the average person was to process the conflicting advice, especially with stories such as Smith's making news.

"I think what the lay person needs to do is spend a little bit more time putting pressure on their congressmen and senators to pass some food safety legislation that's been hung up in the House and the Senate," Marler said.

October 11, 2009

Their combined wealth is more than enough to insure the uninsured for the next twenty years or more.

It's great to know that during the worst economic crisis since the Great Depression, the wealth of the 400 richest Americans, according to Forbes, actually increased by $30 billion. Well golly, that's only a 2 percent increase, much less than the double digit returns the wealthy had grown accustomed to. But a 2 percent increase is a whole lot more than losing 40 percent of your 401k. And $30 billion is enough to provide 500,000 school teacher jobs at $60k per year.

Collectively, those 400 have $1.57 trillion in wealth. It's hard to get your mind around a number like that. The way I do it is to imagine that we were still living during the great radical Eisenhower era of the 1950s when marginal income tax rates hit 91 percent. Taxes were high back in the 1950s because people understood that constraining wild extremes of wealth would make our country stronger and prevent another depression. (Well, what did those old fogies know?)

Had we kept those high progressive taxes in place, instead of removing them, especially during the Reagan era, the Forbes 400 might each be worth "only" $100 million instead of $3.9 billion each. So let's imagine that the rest of their wealth, about $1.53 trillion, were available for the public good.

What does $1.53 trillion buy?

It's more than enough to insure the uninsured for the next twenty years or more.

It's more than enough to create a Manhattan Project to solve global warming by developing renewable energy and a green, sustainable manufacturing sector.

And here's my favorite: It's more than enough to endow every public college and university in the country so that all of our children could gain access to higher education for free, forever!

Instead, we embarked on a grand experiment to see what would happen if we deregulated finance and changed the tax code so that millionaires could turn into billionaires. And even after that experiment failed in the most spectacular way, our system seems trapped into staying on the same deregulated path.

Instead of free higher education, health care and a sustainable economy, we got a fantasy finance boom and bust on Wall Street which crashed the real economy. We have our 400 billionaires, and we have 29 million unemployed and underemployed Americans. We have an infrastructure in shambles. We have an environment in crisis. We have a health care system that would make Rube Goldberg proud. And we have the worst income distribution since 1929.

I hazard to guess that each and every Forbes 400 member could get by with a net worth of $100 million. I don't think that would kill their entrepreneurial drive or harm our economy--in fact it would be a major boon to the economy to step back from the edge of such massive concentration of wealth. The real problem is getting there form here. A wealth tax that kicks in when you become worth more than $100 million would be a good start. The Eisenhower tax rate on adjustable gross income over $3 million a year would help as well.

And please let's not call it socialism, now that we've placed the entire financial sector on welfare to the tune of over $13 trillion in subsidies and guarantees. (By the way, the yearly budget outlays for means tested programs for low income citizens is about $350 billion per year. So Wall Street's welfare is about 37 times as large as welfare for poor.)

So if narrowing the income/wealth gap isn't socialism, what is it? It's the America that thrived in the 1950s and 1960s. It's the America that created a middle-class and vowed never to let the financial gamblers return us to another depression. It's an America that put its people to work and built an infrastructure that was the envy of the world.

October 10, 2009

Anyone can fault the timing of the Nobel Peace Prize to Obama as Dr. Reich and others have done with some valid comments.I prefer to look at this prestigious honor not as a symbol of Obama’s specific Achievements but as a recognition of his superb new Tone, Hope,and Voice for the Aspirations of world citizens seeking harmony in these chaotic, threatening times of change. His is a voice for refreshing open dialogue, a vision of unity in self-renewal in the face of discord and distrust.For Obama, it’s all about ``Letting go,´´ of the destructive blockages of the past. It’s aboutusing the right side of the brain´s sense of awareness and reconciliation to open the space for fresh prospects.

In his calm and simple way, Obama is awakening us to the realization we cannot afford to be our own worst enemiesto each other as well as an enemy to Mother earth …. given our scarce natural resources and inability to absorb waves of societal pollution from both verbal and industrial directions. He´s trying to tame our expectations of continuing “the things as usual lifestyle”of4% GDP growth rates and ±70% Consumption levels financed by Debt excesses while a third of the World lives in constant poverty.Such a paradigm ruptures the soul of a society. It does not assure human survival and connectedness to a deeper purpose and harmony on this planet among different peoples living off nature´s limited gifts.

Obama subliminally is suggesting Ego driven societies unconnected with the “WE” or giving voice to the Collective cause humans to become arrogant, lost, selfish, and separated from what stands for real meaning, trust, and truth in their lives. For any society to be in harmony with its past, it must open up a lively dialogue and generosity of spirit. It must “Let go” of unsustainable attitudes and values. Negative energy -- where there is a dominance ofthe inflexible command and contro “I” orEgo -- destroys the ability to listen, to realize a Collective wisdom that opens up new sources of creativity, innovation, and values systems for sustainable economic growth and peaceful coexistence.

Obama resonates a new leadership paradigm of opening our eyes to how the “WE” (the Collective orUs) and the “I” (the Ego or Me) when merged speak deeper truths and cultural foundation of accepting each other to create a better living environment for all. This is in contrast to value systems and attitudes fostering mistrust and fear in order to feed man’s need to dominate and manipulate. In this transformation to a more open civil dialogue and engagement, Obama is saying that Hope is not an illusion or nasty word.

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Let´s not forget the Hope lesson from Gorbechev who exposed and admitted the tyrannical, false premise of Communism, symbolized by the virtual reality ofdeath camps and the Berlin Wall. Yet his successful Aspiration of laying naked the collapse of Russia´s inhuman and corrupt governing process would not be crowned by specific Achievements in transforming Russia institutionally into a more tolerant, open, non-authoritirian democracy. Nevertheless ,Gorbechev unleashed a powerful movement and energy for dramatic changes in Russia,having also a remarkably positive world dimension.

I’m of the opinion the Nobel Peace Prize Committee has the same impression of Obama’s innovative, embracing leadership style… . a style that activates a higher level of human consciousness captured in the words,“I am who I am as muchthrough others as through myself.”This appeal and encouragement to a higher consciousnessof shared values where it matters so much– protecting the environment and governing without fear of a nuclear disaster – isthe main reasonObama has been awarded the Nobel Peace Prize.His modest acceptance words reflect a down-to-earth committment to match his aspirationalvision and words with deeds, “I will accept this award as a call to action.”

Common Sense Could Go a Long Way to Promote Food Safety

by Jim Goodman

The New York Times pointed out how a flawed and inadequate USDA meat inspection system has jeopardized the safety of those who eat meat and makes the simple act of eating a burger a potential game of Russian roulette.

E. coli O157:H7, a virulent bacteria found in cattle manure was first identified in 1975 by the Centers for Disease Control and Prevention (CDC) and identified as a cause of human illness in 1982.

E. coli was first identified in 1885, but this new, more virulent strain produces toxins that severely damage the intestinal lining (hemorrhagic colitis). The CDC estimates 0157:H7causes 73,000 cases of illness and 61 deaths per year in the US.

According to the CDC, since 2004, the rates of illness due to 0157:H7 have actually increased. Control measures to decrease the incidence of contamination at slaughter plants initially showed positive results, but the trend has reversed.

Why are food safety measures failing? Why did the O157:H7 show up seemingly out of nowhere and why is it becoming more widespread?

With the dawn of high production agriculture after World War II, cattle that had traditionally been fed a grass and forage diet (to which they were naturally adapted), were moved into huge feedlots holding thousands of cattle and finished on a diet of grain. "Corn fed beef" became the American standard, tender, juicy, artery clogging and energy intensive.

University research indicates that changing the diet of cattle from forage to grain is very likely a cause of the increased incidence of O157:H7. Interesting how the rise of O157:H7 so closely parallels the rise of the feedlot industry.

Is it just coincidence that O157:H7 seemed to arrive as huge feedlots and grain diets became the norm for US cattle production? Is it coincidence that the vast majority of beef recalls have been from huge meat processors, those that grind beef from multiple sources and use ammonia to kill bacteria clinging to the meat?

No coincidence, it's cause and effect. I've seen feedlots where thousands of cattle wade knee deep in manure. Their hides covered with manure, they carry it into the processing plants; the source of contamination has entered the food chain.

I have also watched pasture fed cattle in small local processing plants being carefully and slowly processed. No manure covered hides, no meat of unknown origin; here the potential for contamination is greatly reduced.

Processing over 400 animals per hour, a recipe for contaminated meat, is commonplace in plants responsible for most meat recalls. As low wage workers struggle to keep up with the machinery in one of Americas most dangerous occupations, they must also struggle to keep the meat "clean".

Rather than wait for the contamination to enter the plant, wouldn't it make sense to stop it before it starts? Feeding more antibiotics could reduce the levels of O157:H7 in cattle, but is that the answer?

If high grain diets support a higher incidence of O157:H7, shouldn't we go back to feeding animals the grass and forage they were meant to eat, so we don't need to feed antibiotics.

Improving processing plant inspections is a good idea, but it is only part of the solution. The real solution is minimizing the potential contaminant. Secondly, slow down the processing line so the workers can do their jobs.

CDC tells people to wash their hands, their cutting boards and to cook meat thoroughly. Good sound suggestions, but why is the burden of safety inordinately placed on the consumer? Why are the processors allowed to hide behind the "safe handling instructions" and maximize their profits with impunity?

In what amounts to a sea change at UDSA, Secretary Vilsack has launched the Know Your Farmer, Know Your Food campaign to promote local food production, processing and consumption. He is on to something; safer food, more nutritious food and a revitalized rural economy. Food safety doesn't have to be complex, mostly it depends on common sense.

Jim Goodman is a dairy farmer from Wonewoc WI and a IATP Food and Society Fellow.

Friday, October 09, 2009

Why Obama Should Not Have Received the Peace Prize -- Yet

President Obama's only real diplomatic accomplishment so far has been to change the direction and tone of American foreign policy from unilateral bullying to multilateral listening and cooperating. That's important, to be sure, but not nearly enough. The Prize is really more of Booby Prize for Obama's predecessor. Had the world not suffered eight years of George W. Bush, Obama would not be receiving the Prize. He's prizeworthy and praiseworthy only by comparison.

I'd rather Obama had won it after Congress agreed to substantial cuts in greenhouse gases comparable to what Europe is proposing, after he brought Palestinians and Israelis together to accept a two-state solution, after he got the United States out of Afghanistan and reduced the nuclear arm's threat between Pakistan and India, or after he was well on the way to eliminating the world's stockpile of nuclear weapons. Any one of these would have been worthy of global praise. Perhaps the Nobel committee can give him half the prize now and withhold the other half until he accomplishes one or more of these crucial missions.

Giving the Peace Prize to the President before any of these goals has been attained only underscores the paradox of Obama at this early stage of his presidency. He has demonstrated mastery in both delivering powerful rhetoric and providing the nation and the world with fresh and important ways of understanding current challenges. But he has not yet delivered. To the contrary, he often seems to hold back from the fight -- temporizing, delaying, or compromising so much that the rhetoric and insight he offers seem strangely disconnected from what he actually does. Yet there's time. He may yet prove to be one of the best presidents this nation has ever had -- worthy not only of the Peace Prize but of every global accolade he could possibly summon. Just not yet.

Thursday, October 08, 2009

So Much Happening in Washington and So Little To Show for It, So Far

The Senate Finance Committee is set to vote Tuesday on a healthcare bill that just got a seal of approval from the Congressional Budget Office and is very likely to garner the vote of Republican Senator Olympia Snowe -- a twofer that gives the bill preeminence over four other healthcare bills that have emerged from House and Senate committees over these long months. Unlike those bills, though, the Senate Finance bill won't it have a public insurance option to compete with private insurers. Nor does it allow Medicare to use its bargaining power to negotiate lower drug prices, or adequately subsidize millions of middle-class families who will be required to buy health insurance that will be hard for them to afford. In short, it's a great deal for private insurers and Big Pharma but not such a great deal for middle-class Americans.

Meanwhile, the House Banking Committee is quietly circulating a draft set of reforms of financial markets likely to become the basis for whatever legislation emerges to fix the Street. Barney Frank, who heads the Committee, is a thoughtful progressive. But the draft has gaping loopholes that will let most financial firms escape -- such as one that exempts corporations that deal in financial derivatives from any requirements for capital, business conduct, record-keeping, and reporting if they use derivatives for the purpose of "risk management," which is the very thing they all claim they're doing. Neither the draft bill, nor the Committee, nor anyone on the Hill having anything to do with financial regulation, is raising what I consider to be the two key reforms necessary for avoiding another financial meltdown -- resurrecting the Glass-Steagall Act that once separated commercial from investment banking, and applying antitrust laws to the remaining five biggest Wall Street banks so none is "too big to fail."

At the same time, environmental legislation is now slinking its way through Congress. The Waxman-Markey climate bill was passed by the House in June; John Kerry and Barbara Boxer have now released a Senate version. All four legislators claim to be progressives concerned about the environment, but the bills are, frankly, far short of what's needed. Waxman-Markey gives away 85 percent of pollution permits to the nation's biggest polluters, and the "cap" it proposes on overall carbon emissions would cut greenhouse gas emissions only by an estimated 2 to 4 percent by 2020 compared to the UN reference year of 1990. (If America was to play its appropriate role in a global climate deal, the reduction would be more like 40 percent, and the U.S. would also provide financing and technology so developing countries could reduce their emissions by a comparable amount.) The Kerry-Boxer bill has a stronger cap on emissions but it's still far short of what's necessary -- and it leaves out the hardest part, which is the actual cap-and-trade mechanism. Kerry and Boxer are leaving that to the Senate Finance Committee, of all places.

And what's happening on the job's front? Nothing except a blip of interest in tax credits to small businesses that create new jobs. That's not a bad move (I suggested it myself), but it's rather like bailing out the ocean with a teacup. If that's all there is, we're headed toward two years of double-digit unemployment. No one on the Hill or in the Administration is yet willing to say openly and clearly that the stimulus plan must be larger, and continued through 2010 and 2011.

My friends in the Administration and on the Hill repeatedly tell me "don't make the perfect the enemy of the better," or words to that effect. Politics is the art of the possible, blah blah blah. True. But in each of these areas -- healthcare, financial regulation, environment, and jobs -- the "better" is really not that much better. Forget perfect; anything that offered real reform would suffice for now. But in every case, what should be the centerpieces of reform are being left out.

Why? Congress is overwhelmed with corporate and Wall Street lobbyists (far too many of whom are former Democratic office holders). The White House is trying best it can to push and prod in the right direction but there's too much going on, too many arenas where private interests are framing the debate and stifling major reform, and too many friends of friends and relations of relations who are making tons of money working for the other side. The public doesn't know what's going on because the national media would rather report on the sexual escapades of famous people or social trends or high finance (a recent Pew study of economic reporting shows the vast majority of stories about the Great Recession have focused on Wall Street rather than Main Street). And progressives -- that is, progressive organizations in our nation's capital -- have been remarkably and consistently outgunned, outmaneuvered, or just plain ineffectual. This is largely due to the fact that they're sitting in Washington rather than organizing and mobilizing the rest of the country.